Property prices fall in May
Property price gains have continued to slow as the market cools.
CoreLogic’s Hedonic Home Value Index for May has shown a 1.1% month-on-month decline for home values across Australia’s capitals. The fall was largely driven by declines in Sydney and Melbourne.
Sydney house prices were down 1.3% for the month, while Melbourne prices fell 1.7%. Sydney house prices still sit 11.1% higher than May last year, while Melbourne values are up 11.5% year-on-year.
Brisbane and Adelaide were the only capitals to escape declines for the month, edging up 0.3% and 0.8%, respectively. Hobart saw the steepest fall at 4.8%, followed by Darwin at 3.5%.
“The May home value results should be viewed in the context of demonstrated seasonality; values have fallen during May in four of the past five years. Reading through the seasonality indicates that value growth in the market has lost momentum, particularly in Sydney and Melbourne where affordability constraints are more evident and investors have comprised a larger proportion of housing demand,” CoreLogic research head Tim Lawless said.
Lawless said outside influences such as regulatory changes by the Australian Prudential Regulation Authority (APRA) and rising mortgage rates likely contributed to the slowing growth.
“Another factor that is likely contributing to slower growth conditions is a dent in consumer confidence. Consumer sentiment towards housing, as measured by Westpac and the Melbourne Institute, has shown a marked downturn in May,” Lawless said. “In particular, the Westpac ‘time to buy a dwelling index’, fell 6.5% over the month. According to Westpac, ‘consumer sentiment towards housing shows an increasingly negative view.”