Property prices grew at the fastest rate in more than two years following the federal government's expanded deposit guarantee scheme kicking in, but there is not enough evidence of a direct link between the two, housing experts say.
Home values grew at 1.1 per cent in October, which coincided with places for the 5 per cent deposit scheme being uncapped and property eligibility expanded, housing data group Cotality found.
Economists had predicted the scheme would boost demand and further drive up already growing prices.
Cotality head of research Eliza Owen said while the deposit scheme was one of many factors influencing strong growth, especially in the lower to middle end of the market, it was difficult to establish a causal relationship.
Home prices already climbing
Home prices were already on an upward trajectory following the Reserve Bank's three interest rate cuts since February, growing 0.9 per cent in September and 0.8 per cent in August.
Supporting the case the scheme had an impact is evidence that it drove demand in homes under eligibility price caps, Owen said.
They increased by 1.2 per cent, compared with 1 per cent for dwellings above - a difference of 22 basis points.
Homes under the price caps were already outpacing higher-end homes, as affordability constraints drove buyers to the lower end of the market, but the level of outperformance was particularly high - in the largest 16 per cent of differences going back to December 2009.
The Grattan Institute's Brendan Coates said the deposit scheme would likely not have a material long-term impact on house prices.
"The bigger factor there is interest rates have fallen over the course of the last year," Coates said earlier in November.
