The home prices in Australia have yet again fallen by 0.4% in the month of May 2019. However, the rate of decline has slowed down amidst rising auction clearance rates, and the market sentiments were anticipated to improve further with regulators easing lending rules, as well hopes were up for interest rate cuts.
|Index Results as at 31 May 2019|
|Change in dwelling values||Median Value|
The latest Home Value Index data has been released by the property consultant CoreLogic through a report on Monday, 3 June 2019. The report demonstrates that home prices nationally fell 0.4% in May 2019 from April 2019, when they dropped 0.5% relative to March 2019. The slowdown in the pace of decline has been gradual yet consistent since December 2018 when the home prices were down 1.1%.
According to market participants, the easing of the falling rates has been primarily driven by a lower decline in housing prices for Sydney and Melbourne, that were previously at the other end of the spectrum. However, despite the recent short-term trend, the overall outlook for the Australian housing market remains bleak.
Looking at the trend over the past 12 months, the home prices slid 7.3% (in average weighted terms) nationally. Also, in the major cities of Australia, values may have dipped 0.4% on the month but 8.4% for the whole year. Also, the fall in certain regions has been largely higher than the national average. In some other places, prices haven?t moved at all.
As per market participants, the home prices in Australia have been following a downward trajectory since late-2017, which has led to erosion of household wealth and weighing heavily on consumer spending.
The data released depicts disparity present in the trends across the Australian Housing market. For instance, of all the SA4 capital city regions, some recorded declines and for others, the homes prices were up over the last one year.
So far in the year to May 2019, of all the 107 SA4 regions located across the country, only five SA4 capital city regions witnessed an elevation in the median home prices, led by Hobart at 3.5% in Tasmania., followed by the Australian Capital Territory (ACT) at 2.4% with smaller gains also recorded in other locations. Ironically, Australia?s top-performing capital city regions experienced a decline in home prices over the year, reflecting soft market conditions prevailing in large parts of the country of late. Ryde, in north-west Sydney had the highest decline over the past year with a steep dip of 16% in median prices.
At the other end of the spectrum, the latest data suggest that regional areas which experienced largest price falls over the past 12 months were confined to the broader outback areas of Queensland and Western Australia, as well as the wheat belt of Western Australia, where the bleak agricultural conditions are perhaps having a counter impact on housing values.
In the outback Queensland, the prices plunged by more than 30% over the past one year due to the contributing factors including the East Coast drought as well as the presence of highest level of unemployment levels in the whole of Australia.
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