PHOTO: Australian property prices. Getty

After a sharp decline, Australian property prices are up 4.7%. Let’s take a closer look.

Australian property prices are recovering fast. That’s according to CoreLogic’s most recent Home Value Index, which showed a 4.7% recovery in the national dwelling value index.

The most recent ABS data told a similar story, with a 2.4% quarterly increase in prices, driven mainly by strong growth in Sydney and Melbourne’s property markets.

“New lending commitments to households, auction clearance rates and sales transactions all improved during the September quarter,” said ABS Chief Economist Bruce Hockman.

Of course, Australia is made up of multiple property markets, with varying performance in regions and capital cities.

With that in mind, let’s look at what’s really going on with Australian property prices and what’s driving this growth.

Interest rates have never been lower

The Reserve Bank of Australia cut the cash rate three times in 2019, sending variable home loan rates plunging.

This is undoubtedly driving some of the price recovery. While property prices are still far too high for a lot of people to actually buy anything, borrowing money has never been cheaper.