Australia housing bubble slowly deflating as heat leaves Sydney, Melbourne
SYDNEY: Australian home prices are slowly coming back to earth as the sky-high markets of Sydney and Melbourne lose some heat, though there is still plenty of lift in the smaller cities and regions.
Figures from property consultant CoreLogic out on Friday showed prices in the combined capital cities edged up only 0.3% in March, from February, as Sydney dropped 0.2% and Melbourne 0.1%. Brisbane fared much better with a rise of 2.0%, while Perth rose 1.0% and Adelaide 1.9%.
Values in the regions jumped 1.7% amid a shift to country living and greater space. For the whole March quarter, regional prices climbed 5.1% compared to just 1.5% for the cities.
Combined, prices nationally rose 0.7% in March, to be up 18.2% on the year.
“Virtually every capital city and major rest-of-state region has moved through a peak in the trend rate of growth some time last year or earlier this year,” said CoreLogic’s research director, Tim Lawless.
“The sharpest slowdown has been in Sydney, where housing prices are the most unaffordable, advertised supply is trending higher and sales activity is down over the year.”
The median price of a home in Sydney is A$1.1 million ($823,240.00), well above the national median of A$739,000, while a house would set you back A$1.4 million.
The market had its strongest year ever in 2021 with the notional value of Australia’s 10.8 million homes rising by A$2 trillion to A$9.9 trillion.
The boom was a windfall for household wealth and consumer spending power, but also caused concerns about affordability that will be hot-button issue for Federal elections due in May.
An explosion in mortgage debt also led regulators to tighten lending standards and is adding to the case for a rise in interest rates from the Reserve Bank of Australia (RBA).