Finance Finance News National property report: Housing prices slip for fifth straight month
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National property report: Housing prices slip for fifth straight month

The Australian housing market continues to slow. Photo: ABC
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Australian house prices have posted their slowest annual growth rate since 2016, as Sydney prices dropped for the first time in six years.

Prices in Sydney were down 0.5 per cent in the year to February, the first fall since 2012, contributing to the slowest rate of annual growth for national prices since 2016, according to the latest figures from CoreLogic.

Annual growth rates slowed in every capital city except Hobart, where home values are still at historic peaks, up 13.1 per cent from a year ago.

“This was fuelled by tighter credit policies, particularly focused on investment and interest-only lending, which reduced demand from that part of the market,” CoreLogic head of research Tim Lawless said.

The report also found, over the past month of February, values fell across every capital city except Hobart (+0.7pc) and Adelaide (steady).

The largest monthly falls in housing value were in Darwin (-0.9pc) and Sydney (-0.6pc).

Values were also lower in Melbourne (-0.1pc), Brisbane (-0.1pc), Perth (-0.2pc) and Canberra (-0.3pc).

Sydney’s ‘managed slowdown’

In the past three months, Sydney property values fell by the most (-2.4pc), while Hobart was by far the strongest performer (+3.2pc).

Sydney values have fallen 3.7 per cent since its peak of July 2016, Mr Lawless said.

“It’s not like the Sydney market is crashing – it’s more a controlled or managed slowdown, largely due to a reduction of investment in the marketplace.”

However, there is still not much hope for first home buyers in Sydney – with the median house price above $1 million, and median apartment price at about $761,000.

CommSec chief economist Craig James said Sydney prices could ease even further in 2018.

“Demand for homes is strong in Hobart, outpacing supply, and prices are rising,” Mr James said.

“In contrast, the previously high-flying Sydney market is experiencing a correction in prices.

“More new homes are on the market, giving buyers greater choice.
“As a result, prices are adjusting to more realistic and sustainable levels.”

Hobart at record high … for now

Hobart dwelling values were at a “record high”, with a median price of $416,840.

“It is by far the best performing capital city, rising more than 13 per cent in the past 12 months,” Mr Lawless said.

“This comes after a long period of performance, but it can’t continue much longer.”

After all, the key drivers of Hobart’s top performance in the property market is its “sheer affordability”, he said.

“With values rising double digits annually, that will erode its affordability proposition over time.”

Darwin has the best rental yields

At 5.9 per cent, Darwin was the capital city with the highest rental yields — but that was not due to the strength of the rental market as such.

Darwin’s dwelling values fell 0.9 per cent in the past month, and 7.4 per cent in the past year, making it the worst performing property market.

Melbourne’s retail yield was 2.9 per cent, making it the weakest rental market in Australia.

On a national basis, average rental yields for houses were 3.5 per cent. For apartments nationally, it was 4.2 per cent.

-With ABC and AAP

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