Melbourne home prices are now lower than they were a year ago

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  • Australian home prices fell last week, led by a particularly large decline in Melbourne.
  • With July almost over, it looks like Australia’s median home price likely fell by around 0.5%.
  • Total property listings remain far higher than a year ago, although there are signs softer market conditions are seeing some vendors hold off putting their property up for sale.

Australian home prices continued to fall last week, led by a particularly large decline in Melbourne.

As such, it looks like Australian home prices likely fell by around 0.5% in July.

According to CoreLogic, the median home price in Australia’s five mainland state capitals — Sydney, Melbourne, Brisbane, Adelaide and Perth — fell by 0.2% over the week in average weighted terms, extending the decline over the past month to 0.6%.

CoreLogic

Melbourne’s median price fell 0.4%, leaving the decline over the past four weeks at 0.8%. Year-to-date, prices in the city have fallen 2.6%, moving annual price growth into negative territory for the first time in several years.

Prices in Perth — still grappling with the fallout from the end of the mining infrastructure boom — fell by 0.3% over the week, leaving the decline over the past month at 0.8%, the same level as Melbourne.

Over the past year, the median price in Australia’s western capital have fallen by 2.4%, continuing the slide that’s become a near-constant feature over the past few years.

Mirroring those familiar results, prices in Sydney, Australia’s largest and most expensive housing market, dipped 0.2% from a week earlier, leaving the decline over the past month and year to date at 0.6% and 3.2% respectively.

At 5.4%, the decline in Sydney’s median price is the largest of any mainland state capital over the past year. However, on current form, Melbourne could soon take its place.

While median prices in Melbourne, Perth and Sydney continued to unwind, there was stronger performances recorded in Brisbane and Adelaide, continuing the outperformance seen so far in 2018.

Prices in Brisbane rose by 0.1% last week, while those in Adelaide were flat. Over the past month, Brisbane’s median price has edged higher by 0.1% while Adelaide’s fell by 0.1%.

Year to date, prices in these cities have risen 0.4% apiece, leaving the change over the past year at 1.2% and 0.7% respectively.

With less than two days left in July, the performance from these capital cities suggests nationwide values likely fell by around 0.5% during the month.

CoreLogic

In recent months, regional prices have held up significantly better than in the capitals, partially reflecting better levels of affordability and less impact from tighter lending standards that have been rolled out over the past couple of years.

We’ll find out the answer for sure when CoreLogic releases its monthly Home Value Index for July on August 1.

Contributing to the recent unwind in prices, CoreLogic said total property listings across the capital cities grew by 7.7% over the past year to 108,542, largely reflecting strong increases of 21.3% and 11.7% in Sydney and Melbourne.

With supply increasing and demand softening in those cities, it’s clearly had an impact on prices.

Across the smaller markets, and in contrast to the trends seen in Sydney and Melbourne, listing levels in all other capitals except for Brisbane and Perth have fallen over the past year, ranging from a decline of 22.4% in Hobart to 0.3% in Canberra.

CoreLogic

It’s little wonder why prices in Hobart have been skyrocketing over the past year given the steep decline in stock availability.

However, hinting that recent price movements may be starting to have an impact on behaviour from vendors, new listings in Hobart — defined as those that have not been advertised within the past six months — have increased by 10.8% over the past year.

In contrast, new listings have fallen substantially in Sydney and Melbourne, hinting that softer market conditions are dissuading people from putting their property up for sale.

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