Australian Cities See Decline in Median House Price

Australian home prices have continued to slide last week with modest declines reported across the majority of the state capitals.

CoreLogic reports that the median home price has fallen by 0.1% in average weighted terms, resulting in the decline over the past weeks to be 0.4%.

Sydney, Melbourne and Brisbane all saw prices fall by 0.1% apiece over the past week, while Perth’s median value fell at a larger amount of 0.3%. Meanwhile, Adelaide managed to see an increase of 0.2%.

The past month has seen prices in Adelaide rise by 0.3%, a comparatively strong performance given values in Australia’s other capitals have fallen by between 0.1% and 0.7% over the same time. Adelaide’s prices have now risen by 0.7% over this past year.

Despite this week’s decrease, Brisbane has also seen an increase of median house prices by 0.3% for the year. These increases contrast with Perth, Sydney and Melbourne, which are all seeing a fall by 2.2% or more over the same period.

The median price in Australian capitals combined has seen a fall by 2.7% so far this year in average weighted terms.

The same divergence in the year-to-date performance is also evident in price movements over the past 12 months with modest gains in Adelaide and Brisbane offset by declines in Sydney, Perth and Melbourne.

One cause for the difference in direction seen by Adelaide and Brisbane’s median house prices to Perth, Sydney and Melbourne are thought to have been due to their modest gains in the past 12 months.
Perth has seen a decline of 2.2%, Sydney by 5.6% and Melbourne a more modest decline of 1.6% over the past year. These results have resulted in the national decline of 3.1%.

The national median reflects that Sydney and Melbourne contain approximately 40% of all Australian homes and accounts of approximately 60% of the nations’ entire housing wealth.

Tighter lending standards, still-acute affordability constraints and reduced local and offshore investor activity, along with other factors are all reasons behind the reversal in house prices. Another is that Australia’s largest and most expensive cities have seen an increase in properties being put up for sale.

CoreLogic reported that there are currently 22.3% more homes up for sale in Sydney than there was a year ago, and 12.2% in Melbourne, contributing to a 7.6% national increase over the same period.

Brisbane has also seen an increase in total listing levels which has offset declines in all other capital cities.

However, while total listings have risen sharply in Sydney and Melbourne, new listings — defined by CoreLogic as properties that have not been put up for sale within the last six months— have actually fallen by 7.2% in Sydney, and 6.5% in Melbourne, in comparison to 12 months ago.

That suggests softer market conditions are dissuading some vendors in these cities from putting their property up for sale.

Like Sydney and Melbourne, new listings have also fallen in all other capitals except for Hobart and Canberra compared to the levels seen a year ago.

“While a reduction in new listings across the capitals may, at the margin, helped to limit price declines over winter, it will be interesting to see whether that will remain the case in the months ahead as listing levels inevitably increase during spring”, Business Insider journalist David Scutt states in an article.

“Will demand also improve to match the increase in supply during what is usually the busiest season for activity in Australia’s housing market?” Mr Scutt asks.

With spring nearing fast, we’re about to find out.

Information for article was sourced from https://www.businessinsider.com.au/australia-property-market-house-prices-corelogic-listing-levels-spring-2018-8