Sydney and Melbourne weekly home values are nudging up for the first time in a number of weeks.
After sliding for seven consecutive weeks, Sydney home values manage to just eke out a 0.02% gain as this chart below shows. That’s the first positive weekly read for city since week ending April 9, according to data compiled from research firm CoreLogic’s daily home value indices.
Melbourne home values rose 0.3% in the past week, snapping three straight week’s of losses, according to the data.
Home prices in the nation’s two biggest cities have begun to retreat after doubling since 2009. The surge has made homes unaffordable and banks have been forced by the regulator to tighten lending to curb speculation.
House prices in Australia’s capital cities slipped for the first time in 18 months in May as affordability, data released by CoreLogic last week showed.
Home values in Sydney eased 1.3% in May, marking the first fall since December 2015 while prices in Melbourne slipped 1.7%.
Sydney and Melbourne home values are more than 2% lower than their April peaks, according to CoreLogic data.
While the weekly fall has just been stopped and recent history has shown that the market gathers steam after May, there are more and more signs of a slowdown.
The proportion of successful home auctions is starting to slip and growth in home loans has stagnated as lending curbs bite.
While the preliminary auction clearance rate for the past week came in higher at 73.9%, CoreLogic expects the final number to fall from the previous week, when it is released on Thursday. Last week clearances came in at 71.3%, the third lowest reading so far this year.
Economists including those from UBS have called the top of the housing market, yet most are still cautious on forecasting a crash.
For there to be a real leveling off in annual price growth, we’re going to need to see sustained negative numbers in the weekly house price data and probably lower auction clearance levels.
Deutsche Bank’s research estimates year-on-year house price falls have been associated with auction clearance rates of 45% for Sydney and 55% for Melbourne.