By James Glynn
SYDNEY–Australian house price growth remained strong in January despite growing speculation that the Reserve Bank of Australia could deliver a string of interest rates increases this year to quell a fresh outbreak of inflation.
Australian home values rose by 0.8% in January, according to Cotality’s Home Value Index. That represented an acceleration from the 0.6% increase recorded in December.
The RBA is widely expected to raise official interest rates on Tuesday and signal the potential for more citing growing concerns that inflation will remain above its 2% to 3% target band for some time to come.
Sydney and Melbourne weighed on the headline house price numbers, recording a 0.2% and 0.1% increase, respectively, in January. Mid-sized capitals continued their solid growth run, according to the data.
Still, the outlook is for some cooling in price growth, said Tim Lawless, Cotality’s research director.
“Despite the most unaffordable conditions on record in many cities, along with a rebound in cost of living pressures and prospect of a rate hike as early as this Tuesday, we are still seeing a broad-based rise in housing values,” he said.
“Affordability and serviceability constraints are likely to naturally dampen demand, but also renewed cost of living pressures and a strong chance that interest rates will rise. There is also slowing population growth to consider,” Lawless added.
Cotality estimates the number of homes advertised for sale in January was 19% below levels at the same time last year, and 25% below the five-year average for this time of year.
-Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
02-01-26 1710ET