PHOTO: Housing market conditions remain varied across Australia’s capital cities

The Domain House Price Report for the December 2018 quarter has found that only two capital cities saw house price increases in 2018, with Hobart the standout performer, followed by Adelaide. It also found that Canberra and Brisbane remained flat.

Domain senior research analyst Dr Nicola Powell said that units are performing better than houses.

“Despite weakness across the unit markets in all capital cities apart from Adelaide, national unit prices are holding firmer relative to houses,” she said.

“Affordability constraints and increased first home buyer activity in Sydney and Melbourne have supported unit demand.”

Dr Powell said that the current slowdown is new territory for Australia’s housing market.

“Downturns historically have been driven by interest rate rises or significant changes to economic conditions. Given the low interest rate environment and Australia’s economic position compared to previous slumps, it’s clear access to credit has been the main driver.

“As banks preemptively tighten lending standards prior to the banking royal commission’s final report next month, it is unlikely we will see any further dramatic changes to the lending landscape.”