- Median home prices across Australia’s five mainland state capitals were unchanged last week in weighted terms, an improvement after prices fell 0.2% a week earlier.
- So far this year, prices have increased in Brisbane and Adelaide but fallen in Sydney, Melbourne and Perth.
- Total listing levels remain above the levels seen a year ago, however new listing levels have fallen in all capital city markets except for Hobart.
The steady decline in Australian home prices came to an end last week, coinciding with a noticeable improvement in auction clearance rates.
The only question now is whether this is the start of a new trend or temporary reprieve helped by weak activity levels over winter.
According to CoreLogic, the median home price across Australia’s five mainland state capitals — Sydney, Melbourne, Brisbane, Adelaide and Perth — was unchanged last week in average weighted terms, an improvement after prices fell 0.2% a week earlier.
Across the individual capitals, price slipped by 0.2% in Perth and 0.1% in Sydney, offset by 0.1% gains in Brisbane and Adelaide and an unchanged reading in Melbourne.
A mixed bag, resulting in no change in median prices nationally over the week.
However, underlining why not too much emphasis should be put on the result, the steady weekly reading still left prices down 0.5% over the past month, led by a 0.6% drop in Melbourne and declines of 0.5% apiece in Sydney and Perth.
Prices in Adelaide and Brisbane were unchanged over the same period, leaving year-to-date gains in both cities at 0.4% and 0.3% respectively.
In contrast, median prices in Sydney, Melbourne and Perth have fallen 3%, 2.3% and 1.4% respectively so far in 2018.
While the declines in Perth reflect prior weakness in commodity prices and the ongoing unwind in the west coast mining infrastructure boom, leading to weaker economic conditions than in other parts of the country, the falls in Sydney and Melbourne have been driven by a combination of tighter lending standards, ongoing affordability constraints and lower levels of activity from local and offshore investors.
At a time when demand is comparatively soft, an increase in property listings in both Sydney and Melbourne has also contributed to recent price weakness.
According to CoreLogic, there are currently 26,103 homes listed for sale in Sydney, and 30,029 in Melbourne, up 21.7% and 10.5% respectively from this time a year ago.
Along with small increases in listings in Brisbane and Perth, this has managed to offset lower listing levels in Australia’s remaining capitals, leaving the total number of properties for sale across the country up 7.2% from a year earlier.
While total property listings have increased noticeably over the year, new listings — defined as properties that have now been put up for sale within the past six months — have fallen over the past year in the vast majority of capitals, including Sydney and Melbourne.
This suggests that weaker market conditions may be starting to discourage homeowners from putting their property up for sale.
Only in Hobart, where median prices have increased the fastest of any Australian capital city over the past year, have new listings risen from a year earlier, hinting that the days of rapid price growth in Australia’s southernmost capital may soon come to an end.
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