"Residential recovery may derail rate cut plans"

Here's another article for you guys. this one is sourced from Western Australian Business News and was written by Michael Ramsey and Shanna Crispin.

"Perth's housing market is showing signs of recovery, but analysts say this could put further interest rate cuts in jeopardy.
House prices have increased by 1.3 percent nationally so far this year, but Perth is well ahead of the pack with a 2.4 percent increase.
The city’s median house price is now 3 percent higher than a year ago.
Commsec chief economist Craig James said the Reserve Bank’s decision to cut interest rates in December increased buying activity, especially in WA.
The Reserve Bank cut the cash rate a quarter of a percentage point to 3 percent in December and has delivered 1.74 percentage points in cuts since November 2011.
That had prompted increased activity amid homebuyers nationwide, but Mr James said WA’s economy had compounded the increase.
“Given the strength of the WA economy it makes sense that Perth is leading the way on home price,” Mr James said.
He expected the revival to continue throughout 2013 and forecast the median house price to rise by 22-3 percent nationally.
If the revival continued at the current rate, Mr James said it could force the Reserve Bank to rethink any plans for future interest rate cuts.
“If demand for homes continues to lift over January, pushing up prices, the Reserve Bank will shelve and plans to cut rates,” he said.
The positive activity this month follows a strong December quarter in WA’s housing market; the Real Estate Institute of WA found the median house price rose from $480,000 at the end of September to $495,000 at the end of the year.
However REIWA president David Airey said that could be attributed to more higher-priced properties changing hands.
“Overall sales increased by 4 percent in the quarter with increased activity in the higher price ranges. We have recorded more activity in the $600,000 to $700,000 ranges as well as homes over $800,000,” Mr Airey said.
Perth’s western suburbs recorded the biggest spike in activity, with sales jumping 57 percent on the September quarter.
The increased activity has resulted n the number of selling days dropping from 71 to 62 for the quarter.
Treasurer Troy Buswell said a 28 percent increase in the number of Western Australians accessing the first Home Buyers Grant last year was ‘clear evidence’ the housing market was gaining strength."