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UK and Australian House Prices Rise 0.5% in May as Rate Cuts Fuel Rebound

Markets rebounded in May following April's stamp duty-driven slump, underpinned by low unemployment coupled with rising wages.

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A crane is seen amongst residential properties in Sydney, Australia, March 12, 2025. REUTERS/Hollie Adams/File Photo
Residential properties line the Sydney suburb of Birchgrove in Australia, August 16, 2017.  REUTERS/Steven Saphore/File Photo

Overview

  • UK house values climbed 0.5% in May to an average of £273,427, reversing a 0.6% drop in April and delivering a 3.5% annual gain, according to Nationwide Building Society.
  • Australian home prices increased by 0.5% in May to a median $831,288, marking the fourth consecutive monthly rise as buyers respond to recent and anticipated rate cuts, Cotality data show.
  • HMRC figures reveal UK property sales fell 64% to 64,680 in April after stamp duty thresholds reverted, while Bank of England data show net mortgage borrowing plunged by £13.7 billion during the same period.
  • Savills warns that planned adjustments to mortgage stress tests could cut first-time buyer deposits by about £13,000 but may push average UK house prices up by as much as £19,000 over the next five years.
  • Low unemployment, rising wages and expectations of further rate cuts have bolstered buyer confidence and market resilience, although affordability remains stretched in high-cost areas such as London.