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Housing downturn gathers momentum

Housing downturn gathers momentum

The value of Australian property is falling at the fastest annual rate since 2012, according to CoreLogic.

CoreLogic’s data shows that national values have fallen for the tenth consecutive month in July, with a 0.6% drop over the month, bringing the average down 0.9% over the rolling quarter and 1.6% lower over the past twelve months.

Tim Lawless, CoreLogic’s Head of Research, suggested “the weakness in dwelling values is being driven by the long running declines in Perth and Darwin along with an acceleration in the rate of decline across Sydney and Melbourne and slowing growth rates across most of the remaining regions.”

Home prices increased in three capital cities, including Darwin +0.4%, Canberra +0.2% and Brisbane +0.1%, while Hobart prices remained the same in July. In regional areas, home prices were down by 0.4% in July, but are still up 1.6% on the year, the data showed.

Sydney and Melbourne

Melbourne has been leading the downturn for capital cities, with the quarterly rate of decline outpacing Sydney since May this year.

Melbourne property values were down 1.8% over the past three months, while Sydney was down 1.1%, according to CoreLogic figures.  CommBank’s economists are forecasting prices in Sydney and Melbourne will continue to drop.

“Sydney dwelling prices will continue to fall with a peak to trough decline of around 10%,” CommBank said. Like Sydney, Melbourne prices could fall around 8% they said in a note, taking prices back to where they were in late 2016, according to forecasts from the economics team.

Quarterly highlights

CoreLogic also reported on some of the highlights over the three months from May to July 2018, which included:  

  • Best performing capital city was Hobart with 1.1% increase
  • Weakest performing capital city was Melbourne 1.8% decrease
  • Highest rental yield was Darwin at 5.7%
  • Lowest rental yields was Melbourne at 3.0%

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Past performance is no guarantee of future performance.