The average price of houses across Australia’s capital cities rose 3.4% in the fourth quarter from the previous quarter, the Bureau of Statistics said Tuesday.
House prices rose 9.3% compared with the same quarter a year earlier. In the country’s commercial capital, Sydney, house prices rose 4.7% in the quarter. Perth, in resource-rich Western Australia state, recorded a 3.3% rise over the same period.
Increases in house prices over the past year is unsettling Australia’s central bank as they bring with them the potential to destabilize the economy if the real-estate market runs too hot.
The Reserve Bank of Australia last week left its benchmark cash rate at 2.50%, but signaled to markets further interest rate cuts are unlikely. It had cut interest rates eight times between late 2011 and mid 2013 to cushion the economy against a slowdown in mining investment.