Residential property prices in Australian major cities continued to fall in June, elongating the negative run to the ninth month running.
According to the latest index of home prices from property consultant CoreLogic, property prices in Australian major cities dropped by 0.3 per cent in June, following a fall of 0.1 per cent the previous month.
The latest fall left property prices in Australian capital cities down by 1.6 per cent over the last twelve months.
The news was better for regional residential property prices which recorded annual growth of 2.2 per cent. This left the combined property market down by 0.8 per cent year-on-year from June 2017.
It is thought that tighter lending standards have stifled investment demand in Sydney and Melbourne, a trend that seems unlikely to reverse anytime soon, and is having an effect on the whole Australian residential property market.
Along with tougher rules from regulators, lenders have also been raising borrowing standards amid revelations of widespread malpractice on loans and financial advice among several major institutions. There have also been measures introduced to charge extra taxes to overseas property investors.
This has led to a cooling of the previously hot property markets of Sydney and Melbourne.
Sydney and Melbourne comprise about 60 per cent of Australia’s housing market by value and 40 per cent by number.
Prices in Sydney eased 0.3 per cent in June, leaving values down 4.5 per cent year-on-year. Property prices had been growing by more than 20 per cent a year at the peak of the boom.
Melbourne saw a drop of 0.4 percent in the month, while annual growth slowed to 1.0 per cent.
The best performing property market in Australia continues to be the Tasmanian capital of Hobart, where property prices have risen by 12.7 per cent over the past year.
CoreLogic Head of Research Tim Lawless said: ‘Tighter finance conditions and less investment activity have been the primary drivers of weaker housing market conditions and we don’t see either of these factors relaxing over the second half of 2018.’
However, Lawless also noted that despite the latest declines, values nationally were still up 32 per cent over the past five years.