- Home prices fell across a majority of Australian mainland state capital cities last week, all but ensuring the national downturn will extend into a 13th consecutive month.
- Prices in Melbourne and Sydney have fallen nearly 5% year-to-date, a weaker performance than the smaller mainland state capitals.
- Total property listings in Sydney and Melbourne have risen nearly 20% over the past year.
Home prices fell across a majority of Australian state capital cities last week, all but ensuring the national downturn will extend into a 13th consecutive month.
The losses were once again led by Melbourne, Sydney and Perth, home to the fastest falling property values this year.
According to CoreLogic, the median home price in Sydney, Melbourne, Brisbane, Adelaide and Perth fell by 0.1% last week in average weighted terms, extending the decline over the past month to 0.6%.
Year-to-date, the median price in these cities has fallen 4.5%, largely reflecting ongoing weakness in Australia’s largest cities, Melbourne and Sydney.
Over the week, prices in Melbourne fell by 0.2%, leaving values over the past four weeks and year-to-date at 0.7% and 4.9% respectively.
Sydney prices also fell with the median value easing 0.1% from a week earlier. Over the past month, values in Australia’s most expensive capital city market have fallen 0.6%, leaving the decline since the beginning of the year at 4.7%.
Perth, at 0.3%, actually outpaced the pace of declines seen in Melbourne and Sydney last week, leaving the drop over the past month at 0.8%, the fastest of the five cities monitored.
Year-to-date the median value in Australia’s western capital has eased by 3.5%, continuing the broader downtrend that’s now been in place since the end of the mining infrastructure boom earlier this decade.
Adelaide prices also fell by 0.1% during the week while those in Brisbane managed to buck the broader trend with an increase of 0.1%.
Over the past four weeks prices in these capitals have held steady, leaving gains since the beginning of the year at 0.4%.
Adelaide and Brisbane have comparatively more affordable housing prices than those in Sydney and Melbourne, helping to limit the impact of tighter lending standards towards high debt and loan to income borrowers that have been rolled out in recent years.
Reduced local and foreign investor activity in Sydney and Melbourne, locations previously favoured by those groups, is another factor that helps explain the recent divergence in prices in Australia’s southeastern mainland state capital cities.
At a time when demand for housing is soft as a result of regulatory changes and pessimism towards the outlook for market conditions, changes in listing levels across the capitals has also contributed to recent price movements.
CoreLogic says the total amount of properties listed for sale across the capitals rose to 122,555 last week, up 10.5% from the levels seen in the same week a year earlier.
In Melbourne and Sydney, where prices have fallen the most over this period at 4.6% and 6.3% respectively, the amount of listings has surged by 19.5% and 18.6%, far outpacing increases seen in Brisbane, Perth and Canberra and outright declines in Adelaide, Hobart and Darwin over the year.
The increase in total listings has come despite a reduction in new listings — defined as those that have not been on the market at any point over the past six months — which have fallen 2.8% nationally over the year to 30,127.
The decline in new listings suggests weaker market conditions are discouraging some homeowners from putting their property up for sale, especially in Sydney. More broadly, it also indicates that it’s now taking a longer period for the average property to sell once put on the market.
While new listings are lower than they were last year, November and early December are periods that traditionally see a sharp increase in stock hitting the market before the start of summer holidays.
Given soft demand — as seen in recent auction clearance rates which continue to hover at multi-year lows — this seasonal increase in supply carries the potential to see home prices fall a little faster in the months ahead in the absence of an improvement in buyer sentiment.
CoreLogic will release its October Home Value Index for October — including more in-depth information on price changes in individual markets — on Thursday, November 1.
After falling for 12 consecutive months previously, today’s figures suggest a 13th month of price declines nationally will be reported.