Real estate markets are driven by a number of factors. House prices reflect the sensitivity of those factors. The Inflation Rate is one of those factors which is has a direct relation to interest rates. Interest rates are adjusted by the Reserve Bank of Australia in order to meet its inflation targets of two to three percent.
In relation to property, the median price is one of the most reported, discussed and analysed pieces of data. On the surface it can give you an indication of the value of houses and units in a particular city or suburb. It can also provide an indication of the trend and the strength of a particular market and be a reflection of the general sentiment and confidence in the market.
The long term credit growth rate and the national property median price growth rate have a highly correlated relationship. If long term credit growth is on an upward trend, then property prices are likely to follow, with a similar relationship in a downward trend.
The Cash rate is the interest rate which banks pay to borrow funds from other banks in the money market on an overnight basis, and it serves as a benchmark rate around the country. The Reserve Bank of Australia (RBA) is the administrator of the cash rate and the RBA board meets monthly to decide he most appropriate monetary policy for Australia.