Housing prices fell 0.2% in June to a median price of $462,500, according to the latest figures from RP Data, with prices also falling 2% over the year as the property market continues to struggle through a bleak winter selling season.
The data also comes one day after more economists factored in an interest rate rise this year after inflation rose 0.9% in the June quarter, possibly driving even more prospective buyers away from the market.
The RP Data figures show prices fell a seasonally adjusted 0.2% across the entire country, with prices falling in every capital city except in Hobart, where they rose by 0.9% to a median of $322,500.
Prices fell the most in Darwin, by 2.8%, while they fell by 0.5% in Adelaide, by 0.3% in Brisbane and by 0.2% in Sydney. In Perth they fell by 0.2%, and in Melbourne and Canberra by 0.1%.
The city with the highest median price remains Sydney at $515,000, followed by Melbourne and Canberra at $485,000.
Over the quarter, Melbourne prices fell the most by 1.6%, while Brisbane came in second with 1.3%, along with Perth. Adelaide prices fell by 1.2%, Sydney by 0.2%, Hobart by 0.5% and Darwin by 0.6%. Canberra prices are the only ones to have increased over the past three months, by 0.5%.
Over the year, the largest falls have been in Brisbane and Perth with drops of 6.3% and 4.7% respectively, followed by 2% in Melbourne, 3.1% in Adelaide, 2.7% in Darwin and 2.8% in Hobart. Prices have also fallen by 0.3% in Canberra.
RP Data research director says the original effects of natural disasters are now beginning to fade out from these figures.
“In January we saw Aussie home values fall by 1.2% which was the weakest monthly result on record. Over the March quarter home values were down 1.8%. Since that time we have seen the rate of decline slow along with an improvement in our leading indicators,” he says.
He also says that house values were down 2.5% and 2.7% in regional Western Australia and Queensland respectively, but this is most likely to be concentrated “within the ‘lifestyle’ centric markets long the coastline” rather than in resource-rich areas.
Lawless says that market conditions are “clearly being dampened” by low levels of consumer confidence.
“The higher than expected CPI figures earlier this week are likely to reignite the interest rate debate which is not going to assist with an improvement in consumer sentiment.”
Rismark economist Christopher Joye says the RBA is likely to raise rates even twice to address rising inflation, allowing values to soften and creating opportunities for investors.
“Higher rents means the rental market will tighten beyond its already firm levels, with vacancy rates near all-time lows. In turn, this will drive rents and yields even higher.”
“Over the next year we expect to see wages and disposable incomes continue to rise solidly while house prices flat line or taper modestly.”
However, Lawless says the bottom of the market may be fast approaching.
“Some of the key leading indicators have recently shown improvement, suggesting the housing market may be approaching the bottom of the cycle.”
The average selling time reached a high of 58 days back in March and is now down to 52 days. In contrast, the level of vendor discounting has risen to 6.8% in June as vendors become more willing to meet market price expectations.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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