Reserve decision will boost rate of recovery

The Reserve Bank's decision this week to reduce official interest rates by 50 basis points is good news.
Falling rates and solid signs of an improving local economy provide the Sydney housing market with the prospect for increased buyer activity and further increases in median house prices this year.
Australian Property Monitors has recently reported that the Sydney median house price rose strongly by 1.4 per cent in the March quarter.

The city's suburban regions also recorded encouraging increases in median house prices during the quarter.
The only exception was the northern beaches, where prices were down marginally, by 0.5 per cent.
The top performer was the central coast, where median house prices rose by 5.7 per cent. The next best were Sydney's south, up 5 per cent, Canterbury-Bankstown, up 4.8 per cent, and the western suburbs, where median house prices increased by 4.3 per cent.
Despite the increases, price levels in some areas are still below those recorded a year ago.
The worst performer over the past year was the lower north shore, where median house prices were down by 6.6 per cent.
The city and east region fell by 5.3 per cent and the northern beaches was down 4.9 per cent compared with March 2011.
Several regions, however, have recorded increases in the median house price in the past year. The best was the upper north shore, which was up 1.9 per cent.
Sydney's west was up 1.8 per cent, while house prices in the south-west rose by 1.5 per cent over the year to March.