The past few months have told a consistent story: Australian home prices are on a steady decline amid strict lending criteria and weaker investment activity.
According to CoreLogic's latest Home Value Index, dwelling values in June went down by 0.2% compared to the previous month and 0.8% from last year. This is the ninth consecutive month-on-month decline in national home values, and home values across the country have already dipped by 1.3% since the market's peak in September.
CoreLogic research director Tim Lawless said it was important to remember that despite the current downward slide, national home values are still 32.4% higher than five years ago.
"This highlights the wealth creation that many homeowners have experienced over the recent growth phase, but also the fact that recent home buyers could be facing negative equity," he explained.
Lawless said that the market weakness was largely attributable to the tighter finance conditions and less investment activity. He also predicted that, despite the 10% investment speed limit being lifted this month, the market will remain weak for the rest of the year.
For the June quarter, national dwelling values declined by 0.5%, dragged by the 0.8% drop across combined capital cities. The largest decline amongst the capitals over the June quarter was in Melbourne, with dwelling values down 1.4%, followed by the declines in Sydney (0.9%), Darwin (0.8%) and Perth (0.7%).
Regional markets continued to show strength, with values inching up by 0.6% for the quarter. Of those, Victoria’s regional markets have shown the highest rate of capital gain over the June quarter (1.8%), closely followed by regional Tasmania (1.7%).
Related Stories:
Sydney housing market poised to languish until 2021
Moody's: Housing market to remain chilly for the rest of the year
Collections: Mortgage News
Share