Australia’s home prices surge by most in over two years in October

SYDNEY (Reuters) -Australian home prices jumped by the most in more than two years in October as rate cuts and government policies fuelled buyer demand, data from Cotality showed on Monday, while rents also increased.

That added to signs financial conditions might not be as tight as thought as the Reserve Bank of Australia worries about a resurgence in inflation that has crushed market bets of more policy easing this year.

KEY DETAILS

* National home prices rose 1.1% to a record median value ofA$872,538 ($566,975.19) in October, marking the strongestmonthly gain since June 2023, figures from Cotality, formerlyCoreLogic, showed. * The monthly gain was broad-based and led by a 1.9% jump inPerth. Sydney prices rose 0.7% and Melbourne, which has beenlagging behind in the recent market recovery, gained 0.9%. * Three rate cuts since February and a government policy tohelp first home buyers enter the market with just a 5% depositthat kicked in on October 1 fuelled buyer demand against thebackdrop of a persistent shortage in housing supply. * The lower quartile and middle of the market haveregistered the fastest gains in values. * Rents are up 0.5% over the past three months, with thenational rental vacancy rate holding around record lows of 1.4%.

($1 = 1.5389 Australian dollars)

(Reporting by Stella Qiu; Editing by Jamie Freed)