| 02.12,11. 02:20 PM |
Sydney house prices defy national slump
December 1, 2011
AUSTRALIA'S house prices have fallen for 11 of the past 12 months, with Melbourne and Brisbane recording the steepest falls so far this year and Sydney values staying flat.
Melbourne's prices have tumbled by 5.8 per cent since January, the latest figures from property analysts RP Data-Rismark show.
But the slide in prices follows years of growing affordability pressures for first home buyers, when values shot up by more than 25 per cent in the 18 months to June 2010.
The figures reflect a tough spring selling season, in which auction clearance rates in Melbourne and Sydney remained stubbornly low: between 50 per cent and 55 per cent.
And households are still tightening their debt belts in the face of global economic uncertainty and volatile share markets.
Lending for housing credit in October recorded its lowest growth rate in 34 years.
The RP Data figures show the downward slide in the nation's house prices accelerated last month, with prices falling 0.5 per cent, slightly more than the month before.
Of the capital cities, Brisbane has suffered the most housing pain, its prices have dropped by 7.5 per cent since January.
But in Sydney, a shortage of housing has fuelled demand and kept values steady.
Over the first 10 months of this year, prices fell 1.4 per cent, the smallest decline of any Australian city, apart from Canberra.
There was also an upside to declining prices, according to the RP Data research director Tim Lawless.
A combination of lower interest rates, cheaper houses, and rising incomes was making housing more affordable.
The outlook for housing may be improving, though, with new home sales up 5.5 per cent in October, according to Housing Industry Association figures.
Values had fallen most for the nation's most expensive houses and that was having an impact on median prices, Century 21 agent Charles Tarbey said.
Buyers were now able to take their time, make offers and get a discount on properties.
But the cut in official interest rates earlier this month, while sparking more interest, had been too late for the spring season, Mr Tarbey said.
After years as the engine of Australia's domestic housing market, Victoria was now on the wrong side of economic growth, affordability and supply, property analyst Residex's chief executive, John Edwards, said.
Mr Edwards said the national outlook was now more encouraging: ''the worst is close to being over in the majority of Australian housing markets.''
To some extent, Australia was more immune to Europe's troubles, as it was closely linked to growth in emerging world economies that need our resources, he said. ''These emerging countries are our neighbours and their rate of growth is so large that even a moderate slow down would still allow us to see growth in our economy in years to come,'' Mr Edwards said.
Perth's values fell 3.8 per cent since January, Adelaide's slumped 4.4 per cent and Darwin's slipped by 0.6 per cent, RP Data said.