House prices record fastest falls since global financial crisis
Australia’s housing market has taken another leg down, with Sydney, Melbourne and Perth continuing to lead the declines.
CoreLogic’s monthly figures show prices fell 0.7 per cent nationally last month, with a 0.9 per cent slide in the capital cities and a 0.1 per cent fall in the regions.
Sydney prices dropped 1.4 per cent in November, bringing the city’s total peak-to-trough decline to 9.5 per cent — almost on par with the previous record fall of 9.6 per cent between 1989 and 1991, when interest rates were in the high teens, unemployment was rising towards double digits and Australia was entering recession.
In contrast, Australian interest rates are at record lows, unemployment is currently about 5 per cent and economic growth is around, or even slightly above, average at 3.4 per cent over the year to June 30.
Melbourne’s property price falls have been less precipitous so far, with values down 1 per cent last month, and 5.8 per cent peak to trough.
However, Melbourne’s decline started in November 2017, four months after Sydney’s.
CoreLogic said the two cities combined account for about 55 per cent of the nation’s total housing value and are driving the national falls.
CoreLogic’s head of research Tim Lawless told ABC News there are no signs that either market is about to bottom.
“It does look like the rate of decline is starting to gather a little bit of momentum now, particularly as we start to see owner-occupiers becoming less active in the market, because previously the downturn has very much been fuelled by tighter credit conditions for investors,” he said.
“Our view is that values will continue to trend lower through 2019.
“I think any turnaround in the housing market is very much reliant on credit becoming a bit more available and, potentially, when we do start to see credit loosening up a little bit, that might be a sign that potentially monetary policy [interest rates] might be adjusted upwards as well.”
Mr Lawless said, adding to those downward pressures, is the increasing likelihood of a Labor hovernment enacting changings to restrict negative gearing and reduce the capital gains tax discount.
“I think a decline of around about 10 per cent on a national basis doesn’t look too extreme at the moment,” he said.
“Sydney, considering values are already down 9.5 per cent from their peak, we could see a decline of around 15 per cent in that market.
“Melbourne dwelling values are down a little bit less than Sydney because they peaked a little bit later, but Melbourne dwelling values are already down by about 5.5 per cent since they peaked out and we would expect that values in Melbourne would probably decline by at least 10 per cent as well.”