Melbourne 12.4% house price drop the weakest capital city over past year: CoreLogic
Melbourne's continued accelerated housing downturn has overtaken Sydney to become the weakest capital city market annually, according to CoreLogic's March Home Value Index.
Melbourne's housing market is now down 12.4 percent annually, now ahead of Sydney's 11.8% annual decline.
Sydney's dwelling price declined 0.9 percent over March, driven by units (-1.1%). Houses in the harbour capital dropped by 0.9%, the first month since November that they haven't suffered declines over 1%.
Melbourne saw its houses decline by 1.1% over March, its fifth consecutive month of more than 1% falls.
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Values were down in six of the eight capital cities over the month.
Hobart continued its strength, with another positive 0.6% increase in dwelling values, while Canberra held firm seeing no increases or declines.
CoreLogic head of research Tim Lawless noted that the market downturn has become geographically more widespread.
The 0.6% drop in March was actually the smallest of the month-on-month declines since values fell by 0.5% in October last year.
“While the pace of falls has slowed in March, the scope of the downturn has become more geographically widespread," Lawless said.
Lawless said that the housing market has recently shown some tentative signs that the downturn in dwelling values is losing some steam.
“Although this is a positive development, the outlook for the housing market will continue to be affected by uncertainty related to the federal election, lending policies and more broadly, domestic economic conditions.
“Federal elections generally cause some uncertainty, which is likely amplified more so this time around considering the potential for a change of government which will also involve significant changes to taxation policies related to investment.”
“No doubt, some prospective buyers and sellers are delaying their housing decisions until after the election, however, there is no guarantee that certainty will improve post-election, considering the impact of a wind back to negative gearing and halving of the capital gains tax concession is largely unknown.
"It seems a reasonable assumption that removing an incentive from the market would result in some downwards pressure on activity and prices for a period of time.”
“If elected, the Opposition have flagged that changes to the capital gains tax discount and negative gearing would take effect from January 2020.”