Australian housing conditions weakest since Global Financial Crisis
National dwelling values are down 4.1% for the year.
The CoreLogic November Hedonic Home Value Index has shown continued weakness for Australia's housing market. National dwelling values were down 0.7% for November, led by a 1% decline in Melbourne and a 1.4% drop in Sydney.
Housing declines are accelerating in Sydney and Melbourne. Melbourne values are now down 5.8% for the year ending 30 November, while Sydney values are down 8.4% over the same period. Sydney has seen the most significant decline, with a 9.5% drop in values since the city's peak in July 2017. According to CoreLogic, home value declines are set to outpace those experienced during the last recession, when values in Sydney fell 9.6% between 1989 and 1991.
CoreLogic research head Tim Lawless said a number of factors were driving the downward trend in values in Sydney and Melbourne, including tightening credit conditions.
"Additionally, housing affordability constraints are more pronounced in these markets and rental yields are substantially lower, indicating an imbalance between rental values and dwelling values. The ramp up in housing supply has been more pronounced in these markets against a backdrop of slowing demand, and Sydney and Melbourne have also been more affected by the reduction in foreign buying activity," Lawless said.
While Sydney and Melbourne have driven the property downturn, Lawless said conditions across the country are "increasingly diverse".
"Dwelling values are trending higher across five of the eight capital cities, albeit at a relatively slower pace compared with the previous surge in Sydney and Melbourne. Hobart and regional Tasmania continue to be standouts for capital gain, with values up 1.7% across both regions over the past three months," he said.