Conditions in housing market improving, says Catherine Cashmore: Tweet of the day

Property Observer columnist Catherine Cashmore was first out the blocks to tweet about further good news for the housing market with RP Data-Rismark expecting capital city dwelling values to be up 1.4% over September.

Clues about what the September index will show were revealed by RP Data today.

RP Data national research director Tim Lawless says based on what happened to September 28  “dwelling values across the combined five largest capital cities of Australia are likely to increase by around 1.4% over the month of September, and the quarterly rate of growth will be around 2.0% over the quarter; that’s the strongest quarterly change since May 2010”.

The full RP Data results for September will come out at 10am on Tuesday, just a few hours before the RBA makes its October cash rate announcement at 2.30pm.

The performance of the housing market will be one key aspect of the economy that will be deliberated on by the RBA board in coming to its decision.

According to Lawless, the latest data “reinforces the notion that Australia’s housing market, at least at a macro level, is moving past the correction phase which saw values fall by 7.5% between the end of October 2010 and the end of May 2012”.

“The improvement in market conditions can mostly be attributed to interest rate settings and the prospect of a low interest rate environment over the medium term.

“Improving housing market conditions are likely to be front and centre on the agenda of discussion items when the Reserve Bank board meets next Tuesday.

“The Bank would be looking to avoid any further stimulation of the housing market while at the same time ensuring the interest rate setting is appropriate considering the high Australian dollar and sluggish level of consumer demand.”