- Sydney and Melbourne home prices have fallen 1.6% in a month.
- That’s significantly faster than what was seen earlier this year, and may reflect vendors are lowering their price expectations in order to secure a sale.
- Prices in Perth and Brisbane have also fallen over the past month, albeit by a smaller amount. Adelaide is the only Australian mainland state capital where prices rose over this period.
- Property listings in Sydney and Melbourne have surged by more than 20% over the past 12 months. Listings have also increased in all other capitals except for Adelaide and Darwin.
Australian home prices fell sharply again last week, led by continued declines in Melbourne, Sydney and Perth.
According to CoreLogic, home prices across Australia’s five mainland state capitals — Sydney, Melbourne, Brisbane, Adelaide and Perth — fell by 0.3% in average weighted terms, a slight deceleration on the 0.4% pace recorded seven days earlier.
By individual capital, Melbourne’s median price tumbled by 0.5%, faster than the 0.3% fall recorded in the previous week. Sydney, fresh from logging a 0.5% fall seven days earlier, saw its median price fall by an additional 0.3% last week.
Coupled with prior declines in late November, the falls left home prices in Australia’s largest and most expensive housing markets down a whopping 1.6% over the past month.
Perth’s median price slid by 0.2% last week, leaving the decline over the past month at 0.6%.
In contrast, Brisbane’s median value was unchanged last week while prices in Adelaide actually rose by 0.2%.
Since mid-November, Brisbane’s median price has fallen 0.2%. Adelaide, at 0.3%, is the only mainland state capital where values increased over the past month.
Despite the resilience in Adelaide’s housing market, prices across these capitals still fell by 1.2% from a month earlier in average weighted terms.
Year-to-date, the median price in Australia’s mainland state capitals has now fallen 5.8% by market weighting, reflecting that prices in Sydney, Melbourne and Perth have fallen 8%, 6.5% and 4.2% respectively, offsetting modest gains of 0.2% and 1.3% in Brisbane and Adelaide over the same period.
Similar results were also seen in price movements over the past 12 months, largely reflecting that 2018 is now nearly over.
Sydney and Melbourne contain around 40% of all Australian homes, and still account for around 55% of the nation’s housing wealth despite recent price declines.
That means they’re often influential on nationwide property price measures.
Rather than being driven by one specific factor, the divergence in price movements over the past year reflects a combination of supply and demand considerations.
On the supply side of the equation, property listings in Sydney and Melbourne have soared over the past 12 months, lifting by 22% or more compared to the same period in 2017.
The sharp increase reflects weaker demand with new listings in both cities — defined as those properties that have not been put up for sale in the past six months — falling by 10% over the same period.
That means its now taking longer for the average property to sell once it goes on the market.
The decline in demand reflects the impact of tighter lending standards, along with less activity from local and foreign investors. Importantly, with so much stock sitting on the market and prices continuing to fall, buyers can be picky as to when and if they choose to put in an offer.
With the exception of Adelaide and Perth, total listings have increased in all other Australian capital city markets, suggesting the factors impacting Sydney and Melbourne are also being felt in other pasts of the country, albeit by a much smaller degree.
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