Home values across Australia’s capital cities dropped 1.5 per cent in November, with both the Sydney and Melbourne markets going backwards.
Five out of the nation’s eight capitals suffered falls, with Adelaide, Brisbane and Perth the only cities to post gains, the latest CoreLogic RP Data home value index shows.
Melbourne posted the biggest drop, with values falling 3.5 per cent while Sydney lost 1.4 per cent.
Sydney remained the country’s most expensive city, with a median dwelling price of $810,000.
Hobart was considered the most affordable at $335,000. Values in the harbour city were up 12.8 per cent higher for the year to November 30, but off from their July peak of 18.4 per cent in terms of annual growth.
CoreLogic RP Data head of research Tim Lawless said recent mortgage rate hikes by the major banks, along with tighter lending standards and affordability constraints in Sydney and Melbourne were all helping cool the property market. And that would be welcomed by the Reserve Bank, he said.
“A less buoyant housing market is likely to provide the Reserve Bank with a greater degree of flexibility in adjusting interest rates without as much risk of overstimulating the housing market,” he said on Tuesday.
But Mr Lawless warned that the slowdown in the housing market combined with the current boom in housing construction could mean tough times ahead for people who have bought new properties off-the-plan from a developer.
“Those purchasers who have recently purchased off-the-plan may face challenges at the time of settlement if the valuation of the property is lower than the contracted price, or if mortgage finance is less freely available, or on more expensive terms,” he said.
DWELLING VALUE CHANGES
* Sydney: month -1.4pct, year +12.8pct
* Melbourne: month -3.5pct, year +11.8pct
* Brisbane: month +0.6pct, year +4pct
* Adelaide: month +0.7pct, year +3.3pct
* Perth: month +0.3pct, year -4.1pct
* Hobart: month -2.4pct, year +1.1pct
* Darwin: month -1.3pct, year -4.2pct
* Canberra: month -0.5pct, year +4.5pct
* All capitals: Month -1.5pct, year +8.7pct
(Source: CoreLogic-RP Data Home Value Index)