Oz triumphs amid global crisis

Three cities in Oz have produced unexpected house price figures in the last month…

House prices in the Australian cities of Melbourne, Brisbane and Adelaide rose by more than 20 per cent in the year to March 31, bucking the international housing market crisis and local interest rates at a 12-year high.

Prices in Melbourne rose 25.9 per cent in the first quarter of 2008, compared with the year-ago period, the fastest pace in more than six years. That was followed by advances of 21.6 per cent in Adelaide and 20.8 per cent in Brisbane.

Fastest pace in 4 years

A spokesperson for the Australian Bureau of Statistics observed: “Annual house prices in the nation's eight state capitals gained 13.8 per cent, matching the previous quarter as the fastest pace in four years”.

Craig James, chief equities economist at Commonwealth Bank of Australia added: "Solid population growth is certainly pivotal in driving the stellar gains in house prices. At the same time, not enough new houses and apartments are being built."

The Reserve Bank of Australia increased its benchmark rate in March for the fourth time in seven months to counter the fastest inflation in almost 17 years and a jobless rate at a 33-year low.