\n By James Glynn <\/p>\n
\n 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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
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. <\/p>\n
Still, the outlook is for some cooling in price growth, said Tim Lawless, Cotality’s research director. <\/p>\n
“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. <\/p>\n
“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. <\/p>\n
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. <\/p>\n
\n -Write to James Glynn at james.glynn@wsj.com <\/p>\n
\n (END) Dow Jones Newswires<\/p>\n
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