CoreLogic: Falling house prices in Sydney and Melbourne could open the way for a rate cut

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A fall in Sydney and Melbourne house prices in November looks set to leave overall capital city house price growth negative, according to CoreLogic’s preliminary monthly hedonic index for the month.

Tim Lawless, CoreLogic RP Data’s head of research said in a note this afternoon that continued weakness was “resulting in a negative result over the month to date in both Sydney and Melbourne and foreshadowing a decline in capital city home values when we report our final numbers on Tuesday next week”.

“The five city aggregate index is down 1.4% over the first 26 days of the month, driven by falls across the two largest capital cities, Sydney and Melbourne, where previously capital gains have been the strongest,” Lawless said.

Lawless also highlighted the falling auction clearance rates and record supply were impactingon prices and this combination, along with low inflation could eventually see the RBA cut rates.

Not next Tuesday, but at some point in the future, he said.

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