Sydney, Melbourne property prices continue to slide
Home prices across Australia's major cities slipped for a sixth-straight month in March as tighter lending rules clamped down on investment demand in Sydney and Melbourne, although some other centres fared better.
Property consultant CoreLogic said its index of home prices showed prices in Sydney dropped 0.3 per cent in March, leaving values down 2.1 per cent on the year. Values had been surging at more than 20 per cent a year at the peak of the boom.
Sydney house prices have declined by 2.1 per cent over the past 12 months.
Photo: Bloomberg“The broad-based falls highlight that the softening trend in the Australian housing market is largely due to weaker conditions in Sydney," noted CoreLogic head of research Tim Lawless.
But in brighter news for the nation's most populous city, Mr Lawless said the worst may be over for Sydney's property market, with the 0.3 per cent fall its slowest rate of decline since late last year.
“If the trend towards an improving rate of decline persists, the Sydney housing market
may have already moved through its peak rate of decline," he added.
Melbourne saw a dip of 0.2 per cent in the month, although annual growth stayed positive at 5.3 per cent.
Across Australia, the combined capital cities slipped 0.2 per cent in March, after they fell 0.3 per cent in February. Annual growth across Australia's capital cities slowed to just 0.8 per cent, from 2 per cent in February and 10.5 per cent in the middle of 2017.
Home prices outside the major cities edged up 0.4 per cent in March to be 2.6 per cent higher on the year. Combined, prices across the nation were flat for the month and up 1.2 per cent for the year.
Melbourne saw a dip of 0.2 per cent in the month, although annual growth stayed positive at 5.3 per cent.
Photo: Wayne TaylorThe cool-down in the major cities has been much desired by Australia's bank watchdog. It tightened standards on investment and interest-only loans, leading banks to raise rates on some mortgage products.
The Reserve Bank of Australia has also been concerned that debt-fuelled speculation in property could ultimately hurt both consumers and banks.
The inexorable rise of prices in the major cities put homes out of the reach of many first-time buyers, becoming a political flashpoint.
Yet the boom has also been a boon for household wealth, with the government statistician estimating that housing stock is worth a heady $6.9 trillion - four times the size of annual gross domestic product.
The explosion in wealth had helped offset weakness in wages, so a sustained downturn in home prices could now act as a drag on consumer confidence and spending.
Reuters