Australian dwelling price slippage continues

Australian dwelling price slippage continues
Australian dwelling price slippage continues

Australia's housing markets continue to see price slippage in early 2018. The CoreLogic home value index, covering the eight major capital cities, dipped another 0.2% in March, the fifth consecutive monthly decline with prices nationally now down 1.4% from their Oct peak. Annual price growth slowed to 0.8%, a new low since the price correction in 2011-12. Note that data updates are now clear of holiday distortions with seasonal factors essentially neutral in the March month.

The dwelling-type breakdown continues to show more pronounced weakness for houses, prices down 0.2% in the month and barely up 0.2%yr. Unit prices were again flat nationally in March with annual price growth somewhat firmer at 2.6%yr.

Price weakness continues to be concentrated in Sydney, where the annual rate of decline dropped to –2.1%yr after dipping into negative last month. The detail shows the epicentre of the slowdown is houses (–3.8%yr) and particularly those in the upper end of the market, (–6.5%yr for the top 25% of properties by value). Note that these segments outperformed significantly through the upturn with prices still showing better gains over the last two years than the wider market. Sydney unit prices have been much firmer across the board annual price growth remaining positive.

Melbourne is starting to see a more material slowing although at 5.3%yr, annual price growth remains comfortably above that in the other major markets. Price growth remains particularly strong at the lower end of the Melbourne market (+12.9%yr for the bottom 25% of properties by value).

Price growth was coming from much weaker starting points across the other capital cities and showed more muted slowdowns in 2017. Annual price growth has dipped back to 1.3%yr in Brisbane and 1.7%yr in Adelaide. The pace of price declines has eased a touch to 2.4%yr in Perth although stabilisation remains elusive.

Australian dwelling price slippage continues

Performances vary widely across the smaller capitals, Hobart posting a strong 13%yr gain but price gains more moderate in Canberra (+2.9%yr) and struggling to pull out of a sharp multi-year correction in Darwin (+1%mth but down –7.5%yr). Regional areas have been uneven as well, posting 4-5%yr price gains in NSW, Vic and Tas but about flat in Qld, dipping in SA and falling at a 5%yr pace in regional WA.

Australian dwelling price slippage continues

Overall, the March update is another soft read. While the pace of declines nationally may not be accelerating there are few convincing signs that they are moderating.   Indeed, if anything there are signs that price slippage may be extending to a broader range of markets.

Australian dwelling price slippage continues 

Tags: 
Dwelling Prices House Market

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