Sydney house prices have now fallen more than 4% in the past year

Photo: Ian Waldie/ Getty Images.
  • Australian home prices resumed their slide last week, driven by continued weakness in Sydney and Melbourne.
  • However, median values in Brisbane and Adelaide have risen over the past month and are now unchanged from the beginning of the year.
  • Property listings have fallen in all Australian capitals over the past year except in Sydney and Melbourne.

Australian home prices resumed their slide last week, driven by continued weakness in Sydney and Melbourne.

According to CoreLogic, prices across Australia’s five mainland state capitals — Sydney, Melbourne, Brisbane, Adelaide and Perth — fell 0.1% in average weighted terms, leaving the decline over the past four weeks at 0.2%.

However, as seen in the table below, while the average price fell from a week earlier, that masked a wide divergence from individual markets over the same period.

CoreLogic

Prices in Melbourne, where auction clearance rates weakened noticeably, fell by 0.2%, leaving the decline over the past month at 0.4%, the largest of all mainland state capitals during this period.

The median price in Sydney also softened, dropping 0.1% over the week. That left prices in Australia’s largest and most expensive housing market down 0.2% over the past four weeks.

Prices in Perth, as has been the case for several years, also fell, dropping 0.1%, the same decline seen over the past month.

However, while prices fell in those capitals, they rose in Brisbane and Adelaide, lifting by 0.2% apiece, leaving the increase over the past four weeks at 0.1% and 0.4% respectively.

Fitting with the view offered by numerous forecasters recently that valuations are likely to hold up far better in locations outside of Sydney and Melbourne in the period ahead, there’s also been a noticeable divergence in prices so far this year, and over the past year.

Reflecting recent increases in Brisbane and Adelaide, prices in those capitals are now flat in 2018, reversing the modest declines seen earlier in the year.

In Perth, prices have only fallen 0.4% since the end of 2017.

In contrast, the median price has fallen by 2.3% in Sydney, and 1.3% in Melbourne, so far this year.

The declines in these markets, the largest and most expensive in Australia by some margin, largely explains why the median price has fallen 1.4% across these capitals in average weighted terms since the start of the year.

CoreLogic

Over the past year, the median price in Sydney, Melbourne, Brisbane, Adelaide and Perth has fallen 1.1% in weighted terms, again, largely reflecting weakness in Sydney, and, more recently Melbourne.

Prices in Sydney have fallen 4.1% over the past 12 months. Melbourne, after recording double-digit percentage gains throughout much of 2017, has also seen annual price growth slow to 2.4%.

In contrast, median values in Brisbane and Adelaide continue to inch higher, increasing by 0.8% and 0.7% respectively over the past 12 months.

However, even with those gains, and a noticeable deceleration in annual price declines in Perth, they have not been able to offset recent weakness in Australia’s largest housing markets.

While tighter lending restrictions, weak household income growth, affordability constraints and reduced interest from foreign investors has contributed to recent price falls in Sydney and Melbourne, another factor that has contributed to recent declines is an increase in properties up for sale.

As seen in the table below from CoreLogic, total listings in Sydney now stand at 27,035, up 21.3% on the level seen a year ago. In Melbourne, listings have also risen over the past year, increasing 6.4% to 30,788.

CoreLogic

In contrast, listings in all other capitals have fallen over the past 12 months with the exception of Canberra where they are unchanged.

Across Australia’s capitals, total listings rose 4% to 111,724 over the year, driven entirely by higher stock availability in Sydney and Melbourne.

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