You may have heard that housing market values are falling, as Australia’s home prices start to shift alongside a declining auction clearance rate. It’s a fairly regular headline for newspapers across the country, and there’s a good reason why: the fall is real.
Stats from the Australian Bureau of Statistics (ABS) have shown that more than one Australian capital city has reported a consecutive decline in home price values, leading to a reduction to the value of Australia’s ten million residential dwellings.
According to statistics released for the June 2018 quarter, Sydney’s property prices have fallen 1.2 per cent, dropping for the fourth consecutive quarter, with Melbourne prices sliding with Sydney’s. Melbourne’s drop was smaller, falling 0.8 per cent in the same quarter, but it was the second consecutive slide for the city.
The drops weren’t just limited to Australia’s biggest cities, with both Darwin and Perth reporting drops of 0.9 and 0.1 per cent respectively, with the ABS citing reasons such as dropping investor demand.
“Sydney recorded the fourth consecutive quarter of falling property prices (-1.2 per cent), while Melbourne property prices fell 0.8 per cent, the second quarter of price falls for the city,” said Bruce Hockman, Chief Economist at the ABS.
“The initial slowdown in these markets was spurred by regulatory changes and a tightening in the supply of credit to investors. A drop in investor demand over recent months appears to be adding to the slowing in housing credit growth. The effect of this is more pronounced in the larger property markets of Sydney and Melbourne,” said Hockman.
While the drops aren’t necessarily a positive sign for those cities, it wasn’t all doom and gloom across Australia. In fact, the ABS reported some improvement in parts of Australia for the June 2018 quarter, with Adelaide (0.3%), Canberra (0.6%), Brisbane (0.7%) and Hobart (3.0%) all showing signs of improvement.
However, the fall has changed the value of Australia’s ten million residential dwellings, removing $13.3 billion off the value, leaving it at $6.9 trillion for every home across the country, which amounts to a total drop across the country of 0.7 per cent.
With home loan rates on a bit of a rollercoaster ride at the moment – up for CBA and ANZ, and holding steady at NAB – the fall in home prices across the country could become a more interesting topic for first-home buyers in the coming months.