June 9, 2011
Next time you drive past that glamorous mansion on your way home to your modest three-bedder, you won’t need to feel even the slightest twinge of “If only…”
New data from The RP Data-Rismark home value index for April reveals that luxury homes in Australia’s most expensive suburbs lost 5.4 percent of their value over the last year, while homes in less expensive areas largely held steady, dropping by just 0.9 percent. Homes in the cheapest suburbs also maintained their value, falling by only 0.5 percent.
Nationally, home values in Australian capital cities were down by an average of 1.3 percent.
RP Data’s Tim Lawless said the steady figures in the cheaper suburbs flew in the face of recent reports that first homebuyers were defaulting on their mortgages in droves.
There are currently 31 percent more homes for sale across the capital cities than this time last year, Lawless added. But actual sales are around 13 percent below the five-year average and 21 percent below the same time last year.
“The end result is that a smaller number of prospective buyers have a larger pool of homes to choose from,” Lawless said.
The flow-on effect of the current downturn in the housing market has also impacted the major lenders. For the first time in 40 years, Australian banks are facing the prospect that they can no longer rely on home mortgages for profit growth.
Reserve Bank of Australia (RBA) April figures reveal that housing credit grew by just 0.4 percent, with annual growth at 6.4 percent, its lowest point in 35 years.
Related mortgage links