Capital cities post first monthly gain in a year, Sydney up 1.4
Auction clearance rate hits highest in a year
Possible RBA pause, low listings, rising migration help prices steady
Analysts warn of risks ahead, some still expect another 10 fall

SYDNEY, March 31 Reuters A yearlong slide in Australian home prices is showing signs of bottoming out far earlier than anyone thought possible, greatly lessening the risk of a jump in distressed sales and raising hopes for a soft landing in the economy.

Defying predictions of a crash, prices in Australia39;s eight capital cities have actually risen 0.8 so far in March from February, data from property consultancy CoreLogic showed. The peak to trough decline in these cities of about 10 has only partially unwound the almost 26 surge during the COVID period.

This will be the first monthly gain since values peaked in April last year before the Reserve Bank of Australia embarked on its most aggressive tightening campaign in modern history.

The rebound has been most pronounced in hardhit Sydney where prices are up 1.4 monthonmonth so far in March. That leaves them down 13 from their peak, relatively modest compared to the eyepopping surge of almost 30 during the COVID pandemic.

The tentative turnaround has been a surprise to economists who had expected the slide to last all year given mortgage rates have just hit decade highs after 10 straight rate hikes.

Yet now there is a real chance the Reserve Bank of Australia RBA will…