- Australia’s median home price has fallen in each of the past 12 months, according to CoreLogic. Data suggests that streak looks set to become a baker’s dozen.
- National prices continue to fall a seasonally adjusted annualised pace of just under 10% in weighted terms, according to Macquarie Bank.
- The next six weeks is traditionally a period when new property listings increase. The question is will demand lift by a similar amount?
Australia’s median home price has fallen for 12 consecutive months, according to data from CoreLogic.
Based on the data received so far in October, it looks like the stretch of consecutive declines will soon become a baker’s dozen in the absence of an unexpected trend shift in the final few days of the month.
The chart below comes from Macquarie Bank, showing movements in Australia’s weighted median home price from a seasonally adjusted monthly annualised basis.
So far in October, the pace of declines is running at an annualised pace of just under 10%, around the same levels seen since in recent months after removing the effects of seasonal patterns.
Essentially, that means that while prices are still falling based on the latest data, they don’t appear to be either accelerating or slowing at this point.
However, while recent data points to a continuation of the modest declines seen over the past 12 months, the property market will face a stern test in the coming months as a whole swathe of new listings hit the market ahead of the summer holidays.
This week alone, auction volumes are expected to surge by 30% from the levels seen seven days earlier with most of the increase occurring in Melbourne and Sydney, Australia’s largest and most expensive housing markets.
Even with a significant decrease in auction activity compared to the levels seen in 2017, clearance rates in both cities fell to around 45% last week, at or just above multi-year lows.
The proportion of successful auctions has been falling steadily in recent months, hinting there’s a risk that recent price declines may accelerate a touch given historic trends.
With an influx of new listings expected over the next six weeks, at time when demand is undoubtedly weak, supply and demand suggests there there could be downside risks for prices in the near-term.
According to CoreLogic, median home prices in Melbourne and Sydney have fallen 4.7% and 4.5% respectively so far this year.
Based on the data received so far in October, prices in these cities are continuing to fall at an annualised pace of just over 10%.
CoreLogic will release its October Home Value Index on Thursday, November 1.
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