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Australian homes prices rose to the highest levels since August 2003 in February, courtesy of the record-low borrowing rates and government policies, the latest data from property consultant CoreLogic showed on Monday.

Key details

“National home prices rose 2.1% in February, from January when they added 0.9%. Values were up 4.0% on the previous February. Prices across the major capitals rose 2% in January from the previous month, to be up 2.6% on the year.”

“Sydney and Melbourne were among the strongest markets last month.”

CoreLogic’s head of research, Tim Lawless, said: “Whether this newfound growth in Sydney and Melbourne can be sustained is unclear. At this current rate of appreciation, it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs.”

“With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities,” Lawless added.

Market reaction

The upbeat housing data aids the aussie to hold the upside above 0.7750. AUD/USD was last seen trading at 0.7759, up 0.71% on the day.

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