Dwelling Prices - The Correction Continues

• In May, the 8-city capital cities combined prices published by CoreLogic fell 0.1%. On a year ago, prices were down 1.1%.
• A downturn in the housing market is clearly underway. Dwelling prices nationally have fallen for seven consecutive months. A tightening of lending standards reflecting macro-prudential measures are taking their toll on housing demand. 
• Recent weakness in prices has been led by Sydney and Melbourne, where prices have run up the most over the past few years. That said, prices in these two capital cities are only 4.5% and 1.6% down, respectively from their peaks.
• A correction phase in the housing market is becoming established. We expect that dwelling prices will continue to moderate, especially in Sydney and Melbourne. Falling auction clearance rates and softer lending also point to further weakness in prices ahead. There are still solid fundamentals which is supporting housing demand over the longer-term. Strong population growth and the healthy labour market should limit the extent of the downturn.

 

Please see the attached report for more information.

Download.pdf Back to News