Australian house prices continue to fall

New 2:09PM Monday Feb 02, 2009

CANBERRA – Australian house prices on average fell again in the final three months of 2008, a third straight quarterly decline, new data shows.

Despite cheaper mortgages and greater incentives for first home buyers, prices of established homes on average fell 3.3 per cent in 2008.

The Australian Bureau of Statistics house price index released on Monday shows average house prices in Australia’s capital cities fell by a further 0.8 per cent in the December quarter.

Economists had expected a 1.0 per cent decline.

The worst hit cities during the quarter were Melbourne (down 1.7 per cent), Brisbane (down 1.2 per cent) and Perth (down 0.9 per cent.)

Over the year, Perth prices fell 6.7 per cent, while Sydney and Canberra prices were both off 4.1 per cent.

The Reserve Bank of Australia (RBA) is widely expected to cut its cash rate again by at least 75 basis points when its board meets for the first time this year on Tuesday.

The central bank slashed the rate by 300 basis points between September and December last year in attempts to stave off a recession.