Home hunters have been delivered some welcome news with the recent surge in home prices easing dramatically in April.
An easing of house prices also helps reduce the chance of an interest rate rise from the Reserve bank.
Capital city home values rose just 0.3 per cent in April, after a 2.3 per cent rise in March, the RP Data Rismark Home Value Index shows.
But while price rises cooled in the past month, home values were still up by 11.5 per cent for the 12 months to April.
RP Data research director Tim Lawless said the slowdown in price rises would be a welcome relief for first home buyers and help keep interest rates low.
“The Reserve Bank of Australia has been keeping a close eye on the housing market, and while their commentary hasn’t signalled any housing market alarm bells, the lower rate of growth will be another signal that official interest rates don’t need to move higher,” he said on Thursday.
RBA governor Glenn Stevens has repeatedly warned that strong rises in home prices earlier this year won’t be sustained.
In a speech earlier this month, he said strong rises in prices were usually followed by a fall.
And he warned in February that home buyers should be wary of taking on too much debt in light of a sharp rise in house prices in Sydney.
The RP Data survey showed median detached house prices in Sydney broke through $800,000 in April for the first time on record.
Sydney had the highest monthly rise in total home prices, up 0.5 per cent, and gained 16.7 per cent in the 12 months to April.
The Sydney median price of $680,000 is now twice that of Hobart’s.
Although prices in Melbourne fell 0.5 per cent, it had the second largest annual rise, up 11.6 per cent.
Canberra had the weakest result, with home prices down 1.1 per cent, and up 1.2 per cent for the year.