- Australian home prices fell by 0.2% last week, steeper than the 0.1% decline seen in early July.
- Melbourne and Sydney once again led the declines, falling 0.3% and 0.2% respectively. Prices were also lower in Adelaide and Perth.
- Total property listings across the country remain higher than a year ago thanks to large increases in Sydney and Melbourne.
Australian home prices fell at a faster pace last week, led by declines in all mainland state capitals except for Brisbane.
According to CoreLogic, the median price across the country fell by 0.2% in average weighted terms, led by declines of 0.3% in Melbourne and 0.2% in Sydney.
Along with declines in the largest and most expensive capitals — accounting for around 60% of Australia’s total housing wealth — median prices also slipped by 0.1% apiece in Adelaide and Perth.
Brisbane was the one exception to the rule with prices holding steady from a week earlier.
Combined with prior falls, the weekly movements left prices nationally down 0.5% over the past month.
Melbourne, at 0.7%, led the losses, while prices in Perth, Sydney and Brisbane fell 0.6%, 0.5% and 0.1% respectively. Adelaide values were unchanged over the same period.
Year-to-date, prices in Sydney have fallen the most of the mainland state capitals, shedding 2.9%. They’ve also fallen 2.3% in Melbourne and 1.2% in Perth, dragging the national average down 2.1% despite modest gains of 0.3% and 0.2% respectively in Adelaide and Brisbane.
From a year earlier, prices in Sydney have fallen 4.9%, more than double the 2.1% drop seen in Perth over the same period. While Melbourne prices are still up 0.2% over the past year, given current trends, it appears only a matter of time until it too will turn negative.
In contrast, median values in Brisbane and Adelaide have increased by 1% and 0.8% respectively over the past year.
The continued losses in Sydney and Melbourne, in particular, reflect the impact of tighter lending standards introduced by APRA, Australia’s banking regulator, over the past few years.
While, in APRA’s opinion, the crackdown on risky mortgage lending is now largely complete with any additional tightening of lending standards likely to be “at the margin”, it’s clearly still having an impact on the property market, crimping the ability and amount that borrowers can obtain to finance prospective purchases.
Auction clearance rates currently remain around the lowest level since 2012, hinting of a continued mismatch between what buyers can afford and what prices vendors are seeking.
New home sales have also softened, and has general sentiment towards the outlook for prices, especially in Sydney and Melbourne.
Along with crimping demand, a higher number of property listings has also contributed to recent price falls.
According to CoreLogic, there are currently 107,427 properties listed for sale across Australia’s capitals, up 5.9% on the levels seen this time last year.
Growth in listings in Sydney and Melbourne, up 21.6% and 8.7% respectively over the year to 25,947 and 29,565, have been behind the national increase, masking flat-to-lower stock on offer in all other capital cities.
While new listings in Sydney and Melbourne — defined as properties that haven’t been put up for sale in the past six months — are now lower than a year ago, with demand also soft, continued price declines in these cities are now expected by a majority of housing forecasters.