Property prices in Australia remained on a downtrend in April — however, it seems that the worst is finally over for the market as price falls continued to moderate.
CoreLogic data reveal that Australia’s housing value declined by 0.5% in the past month. Canberra was the exception. An analysis quarterly showed that dwelling values fell by 1.9% because of the declines in Darwin, Sydney, and Melbourne. Prices have fallen 7.2% in the last 12 months.
CoreLogic Research head Tim Lawless said that the market’s slowdown was due to better conditions in Sydney and Melbourne.
“In December 2013, Sydney dwelling values declined 1.8%. The pace of monthly falls has slowed to 0.7% in April, however. He also stated that Melbourne’s values fell 1.5% in December and experienced 0.6% growth in April.
Below is a table illustrating how each state’s capital performed over April.
CoreLogic Hedonic Home Value Index April 2019 |
|||||
|
|
Changes in dwelling values |
Total Return |
Median Value |
||
|
|
Monthly |
Quarterly |
Each year |
||
|
Sydney |
-0.7% |
-2.5% |
-10.9% |
-7.7% |
$780,672 |
|
Melbourne |
-0.6% |
-2.4% |
-10.0% |
-6.8% |
$621,759 |
|
Brisbane |
-0.4% |
-1.2% |
-1.9% |
2.3% |
$484,047 |
|
Adelaide |
-0.1% |
-0.3% |
0.3% |
4.6% |
$430,352 |
|
Perth |
-0.4% |
-2.3% |
-8.3% |
-4.5% |
$440,546 |
|
Hobart |
-0.9% |
0.5% |
3.8% |
9.0% |
$452,302 |
|
Darwin |
-1.2% |
-3.4% |
-7.1% |
-1.6% |
$390,621 |
|
Canberra |
0.4% |
0.2% |
2.5% |
7.1% |
$596,405 |
|
|
|
|
|
|
|
|
Combined Capitals |
-0.5% |
-2.1% |
-8.4% |
-5.0% |
$593,401 |
|
Combined Regional |
-0.3% |
-1.0% |
-2.6% |
2.1% |
$374,712 |
|
National |
-0.5% |
-1.9% |
-7.2% |
-3.6% |
$519,879 |
Lawless said that the moderate price drop and other factors, such as auction clearance rates and mortgage activity, may suggest that the housing industry has rebounded from the worst part of the downturn.
Also Read: Why the housing downturn is not all bad news
“The good news is for homeowners is that the rate atwhich it is falling is slower then what we have seen in previous months. According to him, both markets saw a decline in dwelling values of less than 2% each month between the beginning and end of last years.
George Tharenou is an economist at UBS who believes the market is still far from the end.
“The peak-to-trough price drop is about 8%, which is worse than the GFC and near the highest since at least 55 years ago when Real Estate Institute of Australia data started for Sydney. He stated that we expect price drops to exceed 14% in the near-term, which will have a negative impact on consumption.
Tharenou indicated that there is a good chance that the Reserve Bank of Australia might cut rates twice this fiscal year, one in August, and one in May.
Lawless disagreed, and said that it was unlikely that central banks would reduce rates at the moment.
“If the cash rate goes down, I think most of it will be passed on to mortgage rates. This is due to the current competitiveness of lenders. He stated that while it isn’t certain if it will stop further declines it could be enough for slowing down the rate.
