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Sydney house prices edge up for second week after long decline

City, Urban, Cityscape REUTERS/Stephen Coates
Australia's house prices fell for a ninth straight month in January

Housing prices in Sydney nudged higher for a second straight week, industry data showed on Monday, a possible sign that the market could be bottoming out after an almost year-long downturn.

Prices in Australia’s most populous city rose 0.1 percent last week from the previous week, when values also climbed 0.1 percent, figures from property consultant CoreLogic showed. They are, however, still down more than 13 percent from their peak during the Covid-19 pandemic in January 2022.

In other signs pointing to a steadying of prices, Corelogic’s Daily Home Value Index for Sydney stood at 186.2 on February 20, compared with 186.1 at the end of January. Over the past weekend, the city also recorded its highest preliminary clearance rate for home auctions in a year, with 78 percent successful.

Shane Oliver, chief economist at AMP, said the increases were not necessarily a strong sign that the housing price cycle was turning up again: “I am a bit sceptical and tend to think it reflects the return of bargain hunters and a bit of ‘fear of missing out’ demand, helped along by low listings and optimism coming into the year that interest rates were close to peaking.”

An upturn in prices would make the Reserve Bank of Australia (RBA) less concerned about hiking more. The RBA has lifted rates by 325 basis points to a decade-year high of 3.35 percent to curb red-hot inflation.

In a hawkish tilt, the RBA this month signalled at least two more rate hikes to come, prompting markets to sharply revise up the bets for rates to peak at 4.2 percent.

Australia’s house prices fell for a ninth straight month in January, although the pace of decline eased to its smallest since June.