Wed, Dec 12, 2018 - Page 10 News List

Aussie housing price falls reach lower markets

The Guardian

Property price declines in Sydney and Melbourne are no longer confined to expensive dwellings, with the price falls spreading to middle and lower segments of the market.

Property prices in Australia’s eight capital cities fell 1.5 percent on average in the third quarter, marking nine consecutive months of price declines, Australian Bureau of Statistics figures showed.

The mean price of Australia’s residential dwellings is now A$675,000 (US$485,636), down from a peak of A$697,100 at the end of last year.

Despite the decrease, the mean price is still A$188,600 higher than it was six years ago.

The nationwide decline is being driven by large falls in Australia’s two biggest property markets: Sydney and Melbourne.

The average decline is masking different property market conditions around the country.

Sydney recorded its worst quarterly performance since March 2005, with property prices falling 1.9 percent in the quarter.

For established houses, falls were observed across most segments of the market, with weakness most evident in the middle to upper segments.

Sydney’s price declines are gathering pace. After increasing in the second quarter of last year, its residential property prices have been constantly declining: 1.4 percent in the third quarter last year, 0.1 percent in the fourth quarter last year, 1.2 percent in the first quarter, 1.2 percent in the second and 1.9 percent in the third.

Melbourne also recorded its worst quarterly performance since September 2008, with prices dropping 2.6 percent last quarter.

For established houses, falls were observed across most segments of the market, with weakness most evident in the lower to middle segments.

However, price behavior is mixed across the country. The capital city residential property price indices also fell in Perth (0.6 percent) and Darwin (0.9 percent), but rose in Brisbane (0.6 percent), Adelaide (0.6 percent), Hobart (1.3 percent) and Canberra (0.5 percent).

Over the past 12 months, residential property indices have fallen in Sydney (4.4 percent), Darwin (4.4 percent), Melbourne (1.5 percent) and Perth (0.5 percent), but they have risen in Hobart (13 percent), Canberra (3.7 percent), Adelaide (2 percent) and Brisbane (1.7 percent).

Tightening credit availability and falling property prices were weighing on activity from investors and owner occupiers, bureau chief economist Bruce Hockman said.

“Results are in line with market indicators, with auction clearance rates and sales volumes falling and days on market trending higher,” he said.

Last week, the Reserve Bank of Australia told the biggest banks not to restrict their lending too much during the housing downturn, saying that if borrowers were scared away it would negatively affect the economy.

One of the key lessons policymakers learned from the global financial crisis was the importance of keeping lending flowing and “that lesson is relevant to the situation today,” bank Deputy Governor Guy Debelle said.

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