Home prices across Australia’s capitals rose only marginally for the second straight month in September, led by a slowdown in Sydney, according to CoreLogic’s latest Home Value Index.
Property prices in Sydney rose just 0.2% over the September quarter, the weakest result since values dropped in the March quarter of 2016. However, previous strength in this market means the annual increase in prices to the end of September was still 10.5%.
The rare dip in Sydney house prices offers more evidence that the financial regulator’s tighter lending rules are having an impact on the market.
“The September results confirmed that dwelling values edged 0.2% higher across Australia over the month, led by a 0.3% rise in capital city values and a 0.1% gain across the combined regional markets,” CoreLogic said. “The latest figures take national dwelling values 0.5% higher over the September quarter, which is the slowest rate of quarter-on-quarter growth since June 2016, and national values are up 8.0% over the past twelve months.”
A slowdown in Sydney’s housing market is much desired by the Australian Prudential Regulation Authority (APRA), which has tightened standards on investment and interest-only mortgage loans. Greater tightening has led banks to raise rates on some of their mortgage products.
Melbourne fared much better, with prices rising 0.9% for September and 12.1% on the year.
“The stronger housing market conditions in Melbourne are supported by auction clearance rates which have consistently remained above 70%,” said Tim Lawless, head of research at CoreLogic. “Additionally, advertised stock levels remain remarkably low and private treaty sales continue to sell rapidly, averaging 30 days on market.”
Collections: Mortgage News
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