Australia’s major cities saw home prices jump 11.7 percent year-on-year in February, surpassing the previous peak registered in 2015 and the fastest pace in over six years.
On a monthly basis, house prices for the combined capital cities rose 1.4 percent, based on the index of property consultant CoreLogic.
The hike caused a hassle to Reserve Bank of Australia (RBA) as it had been hoping for the market to cool after regulators imposed tighter lending rules on banks, reported Reuters.
After slashing interest rates in August to a record low of 1.5 percent, the RBA has warned that further easing would encourage more borrowing among households – which are already heavily indebted.
The CoreLogic data revealed that home prices in Sydney and Melbourne increased 2.6 percent and 1.5 in February, bringing the annual growth to 18.4 percent and 13.1 percent, respectively.
“The annual growth rate across the combined capitals hasn’t been this strong since June 2010,” said Tim Lawless, Head of Research at CoreLogic.
“In Sydney, it is the highest annual growth rate since December 2002 when the housing boom of the early 2000’s started to slow.”
Sydney saw home values more than double since January 2008, while those in Melbourne surged by 88 percent.
The price hike within the major cities has made homes beyond the reach of most first-time home buyers while becoming a hot political topic.
The opposition Labor Party has blamed the problem to the favourable tax treatment on property investment, while Malcolm Turnbull’s conservative government pointed to the lack of supply.
Christopher Chitty, Senior Content Specialist, edited this story