Dwelling Prices - Continuing to Moderate

• National dwelling prices extended their slide in June. The CoreLogic eight-capital city combined dwelling price index fell 0.3% in the month, the eighth consecutive monthly decline.
• It took the annual decline from 1.1% in May to 1.6% in June. The tightening in lending conditions is taking a toll on the housing market following a raft of regulatory measures over recent years.
• Corrections continue to be underway in Sydney and Melbourne. Sydney dwelling prices fell 0.3% in June, and are now down 4.8% from their peak in July 2017.  The downturn in dwelling prices in Melbourne has become more entrenched in recent months and declined 0.4% in June. Melbourne dwelling prices however, are down just 2.0% from their peak in November.
• 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 should support 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.

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