Property and capital city house price update

Melissa Jenkins
(Australian Associated Press)

A weakening of confidence in the housing market will continue for some time yet as prices fall and the impact of regulator restrictions is felt, economists say.

Average national home values dropped half a per cent over the 28 days to June 11, with the largest declines in Melbourne, down one per cent, and in Sydney where prices have shed 0.8 per cent over the month, according to property analytics firm CoreLogic.

For the week to June 11, home values across the five major capital cities fell by an average of 0.1 per cent, although Melbourne and Perth improved by 0.1 per cent and 0.8 per cent, respectively.

Auction volumes were down, mainly due to the Queen’s Birthday long weekend, with 1,265 properties going under the hammer, compared with 2,578 the previous week.

But the five-capital city clearance rate of 71.8 per cent was still higher than both the previous week’s 69.8 per cent and last year’s 65.7 per cent.

In another sign that tighter lending conditions are starting to dampen the white hot market, home loan volumes slumped 1.9 per cent in April, almost a full percentage point more than economists had predicted.

The figures, released Australian Bureau of Statistics on Friday, marked the third consecutive month of fewer home loan approvals.

The Australian Prudential Regulation Authority in March told lenders to cap higher-risk interest-only loans to 30 per cent of new residential mortgages, prompting lenders to make interest-only and investor loans more expensive.

ABS figures show that the value of loans for housing investors slumped 2.3 per cent in April, while for owner-occupiers it dropped 1.1 per cent.

St George economists predict home lending will continue to soften for some time as the impact of the APRA restrictions is felt.

“As reflected in recent softening in house price growth, the combination of recent developments has knocked some confidence out of the housing market,” they said in a briefing note.

“As it will take several months for these measures to flow through, we would expect to see further cooling of home lending, particularly for investors.”


CAPITAL CITY MEDIAN HOUSING PRICES

HOUSES

Sydney – $1,000,000

Melbourne – $720,000

Canberra – $663,250

Darwin – $590,000

Brisbane – $520,500

Perth – $515,000

Adelaide – $460,000

Hobart – $360,000


UNITS

Sydney – $745,000

Melbourne – $536,500

Perth – $411,000

Darwin – $409,500

Canberra – $404,000

Brisbane – $390,000

Adelaide – $333,000

Hobart – $285,000

Source: CoreLogic Property Market Indicator Summary week ending June 11, 2017.

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