While properties in Melbourne, Adelaide and Hobart are set for a modest year in terms of property price growth, other parts of the country are likely to enjoy robust rises in home values over 2012, Australian Property Monitors (APM) senior economist Dr Andrew Wilson has claimed.

“I think Canberra and Sydney will be resilient and steady as usual, with Darwin, Brisbane and Perth to be the real stars next year,” Dr Wilson told Real Estate Business.

“We are looking at five to 10 per cent price growth in Brisbane, Perth and Darwin over 2012.”

“And while that may sound like quite a lot of growth, it will basically bring these cities back to where they used to be only a few years ago.”

Dr Wilson’s comments come not long after the release of APM’s annual State of the Market Report which found, in the quarter to October, national median house prices fell by 1.6 per cent and were down by 4.2 per cent over the year

THE ADVISER

Australia's home loan interest rates have officially fallen to their lowest level in two and a half years, according to new research.


Data from RateCity found fixed rates have taken the steepest dive, with three-year fixed rates falling to just 6.29 per cent on average in December and starting at just 5.75 per cent – 150 basis points lower than the average recorded in 2010.


With successive reductions in the Reserve Bank of Australia's cash rate, standard variable home loan rates have also continued to fall steadily throughout the course of the year and have now reached their lowest point since May 2010, dropping to just 6.89 per cent on average.


RateCity's chief executive Damian Smith said lenders are trying to kick start a sluggish mortgage market with attractive deals on fixed and variable rate home loans.


"There were just over 5,300 more borrowers in the property market in the year to October compared to the previous 12 months. While that's not a dramatic increase it does equate to more than $2.5 billion in additional mortgage activity in 2011," he said.


"More importantly, it's the first time we've seen an increase in borrowing in 16 months and the combination of lower rates and flat-to-declining property prices are driving this."

The number of borrowers refinancing has increased significantly over the past 12 months, new data from Loan Market Group has revealed.

The latest official home loan approval figures for October 2011 from the Australian Bureau of Statistics show a 17 per cent rise in refinancing activity compared to the year ending October 2010.

Loan Market chief operating officer Dean Rushton said refinancing was also up 5 per cent nationwide on the previous quarter.

"With the broader credit market bottoming out at a 10 year low this past year, it's refinancing which has kept the market from plunging into much lower levels," he said.

"With many analysts predicting interest rates to continue on a downward cycle, we should see the sustained growth in the refinance market as well as the return of first home buyers and upgraders in the New Year."

Mr Rushton said Loan Market's own enquiries for refinancing had risen 15 per cent in the six weeks since the Reserve Bank lowered the cash rate on Melbourne Cup day.

"The RBA rate cuts in November and December have brought forward queries of those looking to refinance and also first home buyers, particularly in New South Wales," he said.

"These latest ABS figures predate the back-to-back cuts in official interest rates so we will see the impact of those in the coming months."

New home sales recovered moderately in October 2011, following on from the lowest result in more than a decade.

The latest HIA - JELD-WEN New Home Sales Report found the number of new homes sold in the month of October 2011 increased by 5.5 per cent, although sales remained down by 8.0 per cent over the three months to October.

"It is encouraging to see a modest lift in new home sales at the start of the December quarter," HIA chief economist Harley Dale said.

"With falling interest rates, a competitive building market, and a greater availability of skilled trades amidst soft housing conditions, now is certainly a good time to build a new home for those who are financially set to take that decision.

"As it stands the profile for new home sales remains very weak, despite this latest monthly increase. In October 2011 the volume of detached house sales was 29 per cent below the average of the last fifteen years.

"There is a compelling case for another, larger interest rate cut next week, while any logic behind achieving a swift return to budget surplus in 2012/13 is spurious given current global economic conditions."

Detached house sales increased by 5.1 per cent in October 2011 following a 3.3 per cent decline in September. Sales of multi-units rose by 9.0 per cent in October following a 5.5 per cent dip in September.