Melbourne has firmly overtaken Sydney as the nation’s weakest housing market, with both of Australia’s biggest cities posting substantial monthly property price falls in September.
September was the 12th straight month in which the nation’s housing prices fell, with Melbourne’s 0.9 per cent decline leading the way downwards.
Sydney, Perth, Darwin and Adelaide also recorded price falls in the first month of spring, while Brisbane, Canberra and Hobart reported modest prices gains.
CoreLogic data shows that home prices nationally have fallen 2.7 per cent since peaking in September last year, with capital cities responsible for the losses (down 3.7 per cent) while regional areas had a 1.2 per cent gain over the past 12 months.
Over the past year, Sydney was the worst performing city, with prices off 6.1 per cent, followed by Darwin at 3.7 per cent, Melbourne (3.4 per cent) and Perth (2.8 per cent).
Brisbane, Adelaide and Canberra had property price gains at or below the general rate of inflation, while only Hobart had strong gains (up 9.3 per cent).
Regional markets were also starting to slide, with falls across non-metropolitan New South Wales (1.3 per cent), Victoria (0.2 per cent), Queensland (0.6 per cent), South Australia (0.3 per cent) and Western Australia (3.4 per cent) over the three months to September 30.
CoreLogic’s head of research Tim Lawless told ABC News the property price downturn was “gathering a bit of momentum” in spring.
“Partly this is to do with tighter finance that we’re seeing, particularly for investors,” he said.
“But also, during spring we do see a real ramp up in stock levels.
“So we’ve seen quite a rise in advertised stock at a time when buyers are much thinner on the ground.”
This was exemplified over the weekend, when even preliminary auction clearance rates fell below 50 per cent in Sydney, while just above half the properties for auction in Melbourne on Saturday sold.
“The grand finals and the long weekend were clearly a distraction for the markets, so volume numbers were very low,” Mr Lawless observed.
“The trend overall across auction markets has been towards lower clearance rates.”
Mr Lawless said he expected both auction clearance rates and property prices to continue easing into next year.
“It does look like tighter credit could potentially get a little bit tighter from here, considering the interim report from the banking royal commission,” he said.
“That suggests that investor activity is likely to wind down further from here and we are likely to see values continuing to fall throughout the remainder of 2018 and probably through a large part of 2019.”
Written By Michael Janda | 1 October 2018