Australian house prices down in real terms
Hobart was the only capital city to see inflation-adjusted values sit at their peak.
New research from CoreLogic has found home values are down over the past 12 months in inflation-adjusted terms for most capital cities.
In real terms, national dwelling values were down 0.7% over the past 12 months with Sydney recording the largest quarterly fall at 2.2%. Hobart was the only capital city to see an increase over the quarter, with values rising 3%.
Over the past year, Melbourne, Hobart and Canberra were the only capital cities to see dwelling values outpace inflation. Darwin saw the largest 12-month decline at 9.3%, followed by Perth at 4.3% and Sydney, where values fell 4% in real terms.
Over the past 10 years, only Sydney, Melbourne and Hobart have seen home values outpace inflation.
“These latest figures really highlight just how narrow value growth has been in the national housing market over the past decade. It also highlights that low mortgage rates alone have not been the key driver of value growth - mortgage rates are the same in Sydney as they are in Perth yet the former has recorded real growth of 43.3% while the latter has seen values fall by 25.0%,” CoreLogic analyst Cameron Kusher said.
The analysis found that recent value declines mean Hobart is the nation's only capital where real dwelling values sit at their peak. Nationally, dwelling values are 2% lower than their June 2017 peak, while capital city values are 2.5% off their peak.
Kusher said home value growth is expected to remain slow over the coming quarters.
“As a result, when looking at inflation-adjusted dwelling values the expectation is that they will continue to fall over the coming quarters which means that as the cost of other items increase and inflation rises, relatively speaking, the cost of housing will reduce. We’ve seen this result occurring in most capital cities for a number of years but is a relatively recent development in Sydney and Melbourne," Kusher said.