Australian house prices hit a flat spot in the December quarter, recording a fall of 1.4% across the combined capital cities according to the latest release of the Core Logic RP Data home value index.
That’s the largest quarter-on-quarter fall since 2011, RP Data head of research Tim Lawless said in a note accompanying the release of the index.
“Six of the eight capital cities recorded a negative result over the December quarter, with weaker conditions in Sydney and Melbourne acting as the greatest drag on capital city performance,” Lawless said.
Looking at the specific results Sydney was the worst performer with prices dropping 2.3% during the quarter while Brisbane was the standout with a gain of 1.3% across the 3 months to the end of 2015. Melbourne prices were also down, dropping 1.9%.
Nonetheless, the two big capital cities still posted strong gains of 11.5% and 11.2% respectively for 2015.
Suggesting perhaps that the upward momentum in prices across the country is slowing the “complete 2015 calendar year results reveal a 7.8% increase in capital city dwelling values which is the lowest rate of capital gain over a calendar year since 2012 when values slipped 0.4% lower over the full year,” Core Logic said.
In 2016, Lawless is not optimistic about the outlook for prices noting that “it is clear that the strong housing market conditions of 2015 have softened over the final months of the year, setting the scene for more sedate conditions in the New Year.”
He said that across the year Core Logic expects to “see further moderate value declines in Sydney and Melbourne, however considering population growth has remained strong in these areas and economic conditions are very healthy in these cities, we would be surprised if dwelling values fell materially before conditions start to level.”
That’s an outlook support by Brickworks managing director Lindsay Partridge who kept his kilns fired up over Christmas for the first time in a decade and expects construction will continue to boom into 2016 on the back of solid underlying demand.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.