(Updates with comment from economist in fourth paragraph.)
Nov. 1 (Bloomberg) -- Australian house prices declined in the three months through September, the third straight quarterly drop, as the developed world’s highest borrowing costs curbed demand.
An index measuring the weighted average of prices for established houses in eight major cities dropped 1.2 percent last quarter from the previous three months, when it fell a revised 0.5 percent, the Australian Bureau of Statistics said in Sydney today. The median estimate of 19 economists surveyed by Bloomberg News was a 1.5 percent fall. They declined 2.2 percent from a year earlier.
Reserve Bank Governor Glenn Stevens will weigh reducing the benchmark interest rate today for the first time since April 2009 as policy makers balance weaker global growth and domestic inflation against a mining-investment boom. Sixteen of 27 economists surveyed by Bloomberg predict Stevens will lower borrowing costs by a quarter percentage point to 4.5 percent after consumer-price growth slowed last quarter.
“Conditions in the housing market remain soft,” David Cannington, an economist at Australia & New Zealand Banking Group Ltd., wrote in a research report before today’s data.
Prices fell in each of the eight cities surveyed, the report showed. The biggest declines were in Brisbane, Canberra and Melbourne, and the smallest drop was in Sydney, it showed.
A jump in home prices was among reasons Stevens increased the benchmark rate by 175 basis points from October 2009 to November last year.
The RBA’s rate decision is scheduled to be announced at 2:30 p.m. in Sydney.
--With assistance from Daniel Petrie in Sydney. Editor: Brendan Murray, Victoria Batchelor
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