Australia home prices skid in October, giving a slight reprieve to the four-month gains, the latest RP Data-Rismark said.
The RP Data-Rismark, which presents the home value index, based on capital city house prices, declined by 1 per cent in October.
According to RP Data research director Tim Lawless the home price falls show the very tight balance in the country's real estate market.
Mr. Lawless said it is too early to say whether this is a sign of a recovery or a further weakness, but other indicators such as the occupier housing finance numbers and auction clearances point to a steady pace of improvement since February 2012.
"The lowered bencmark rates are making an impact should be pointed out," he added in a released statement.
Higher Demand for Fixed-Rates
Mortgage Choice, Australia's largest independently-operated mortgage broker, said in a separate report that for six consecutive months, borrowers have acquired fixed rate home loans for an average of three years.
Demand for fixed rate home loans reached a six-month high in October as borrowers locked in low interest rates for an average of three years
Demand for fixed rate home loans reached a six-month high in October as borrowers locked in low interest rates for an average of three years, according to the latest loan approval figures from Mortgage Choice, Australia's largest independently-operated mortgage broker.
In October, 22% of all new home loans taken out by new borrowers were for fixed rates, which is just above the 12-month average of 21%.
"Following speculation last month of fewer rate cuts to come this year, and the latest CPI data hinting at less rate activity, it comes as no surprise that borrowers are taking advantage of the good fixed rate loan offers available. By securing their interest rate they are also locking in peace of mind over the next few years," notes Ms Belinda Williamson, company spokesperson.
Despite the increased demand for fixed rate loans, lenders are still discounting their rates to attract new customers. Over the past week, Mortgage Choice saw seven lenders on its lender panel drop their fixed rate loans across a range of fixed rate terms.
Further analysis shows that by far the most popular fixed rate loan term is three years, at 74% of new loans taken out in October. This is followed by two-year fixed rate term loans at 16% of new loans, and five and one year-fixed rate terms at 5% of approved loans, respectively.
October also saw a considerable uplift in the preference for ongoing discount rates loans, reaching 40% of all new loans approved. This follows two consecutive monthly drops in demand in August and September.