Australia’s property market stagnates
Sydney values have fallen again while national property price growth flatlines.
The CoreLogic October Home Value Index has revealed a stagnating property market across the nation. Monthly home values remained flat across Australia, and in the combined capital cities. Once-booming Sydney proved a drag on the results, with home values falling 0.5% in October to be down 0.6% for the quarter.
CoreLogic head of research Tim Lawless said the slowdown in capital gains was largely due to tightening credit policies, which he said had “fundamentally changed the landscape for borrowers”.
“Lenders have tightened their servicing tests and reduced their appetite for riskier loans, including those on higher loan-to-value ratios or higher loan-to-income multiples. Additionally, interest-only borrowers and investors are facing premiums on their mortgage rates which are likely to act as a disincentive, especially for investors who are generally facing low rental yields on investment properties,” Lawless said.
In spite of the flat growth, most capital cities saw a rise in home values for the quarter. While Sydney values fell 0.6%, along with falls in Perth and Darwin of 0.7% and 4.4%, respectively, values were up across the other capitals.
Melbourne saw strong quarterly growth at 1.9%. Hobart was the strongest performing capital, up 3.3% for the quarter for an annual rise of 12.7%.