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The S&P/ASX 200 shed 1.4 per cent in value on Monday on growing concerns about the impact of the coronavirus on China’s economy, particularly around demand for resources such as oil.

Figures from CoreLogic released on Monday highlighted the impact of lower interest rates on the national property market.


House values in Sydney rose 1.5 per cent in January, taking the median value there to $994,300. Over the past quarter, values rose 6.7 per cent, or more than 27 per cent at an annualised rate.

Melbourne was not far behind. House values there lifted 1.4 per cent last month, with the median value reaching $798,671. Over the quarter, values were up 5.6 per cent, or more than 22 per cent at an annualised rate.

All major capitals reported a rise in house values through the month. They were up 0.7 per cent in Brisbane, 0.2 per cent in Adelaide, 0.1 per cent in Perth, 0.9 per cent in Hobart and 0.3 per cent in Canberra.

Separate figures from the Australian Bureau of Statistics suggest the residential construction sector may be bottoming out. After a 10.9 per cent jump in approvals in November, there was a modest 0.2 per cent fall in December.



That took annual growth to 2.7 per cent, the first time it’s been positive since the middle of 2018.

Capital Economics analyst Ben Udy said if house prices kept rising at 1 per cent a month as they had done since June, affordability would be at its lowest since just before the global financial crisis.

“Strong house price gains could prevent the RBA from loosening monetary policy much further,” he said.

But Royal Bank of Canada senior economist Su-Lin Ong said the RBA was facing an increase in the number of risks about its forecasts for the economy.


“For the RBA, the coronavirus will not prompt a policy response but simply adds to the numerous risks which will likely see further policy action this year,” she said.

“We expect the RBA to acknowledge the risk and uncertainty around the possible impact of the bushfires and this virus in the raft of communication this week as the board reconvenes.”

Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

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