Australia

PHOTO: Australia is under the PUMP just like New Zealand. FILE

  • Australian house, unit prices in May went backwards for first time since 2020
  • Sydney, Melbourne and now Canberra suffered median house price falls in May
  • CoreLogic research director said rate rise, affordability issues causing downturn

Australian house and unit prices have suffered the first drop in almost two years as an interest rate rise turns off potential buyers – with wealthy suburbs suffering the biggest drops.

SydneyMelbourne and now Canberra saw prices go backwards in May after the Reserve Bank of Australia last month raised the cash rate for the first time since November 2010.

The CoreLogic data showed the first national fall in property prices since September 2020 – the era before the RBA slashed rates to a record-low of 0.1 per cent.

Across Australia, median real estate values fell by 0.1 per cent to $752,507, with this figure covering both houses and units.

Australian house and unit prices have suffered the first drop in almost two years as an interest rate rise turns off potential buyers. Across Australia, median real estate values fell by 0.1 per cent to $752,507, with this figure covering both houses and units (pictured is a Melbourne auctioneer)

Australian house and unit prices have suffered the first drop in almost two years as an interest rate rise turns off potential buyers. Across Australia, median real estate values fell by 0.1 per cent to $752,507, with this figure covering both houses and units (pictured is a Melbourne auctioneer)

More expensive cities lead the downturn

SYDNEY: Houses down 1.1 per cent to $1,403,964; units down 0.7 per cent to $829,598

MELBOURNE: Houses down 0.8 per cent to $992,474; units down 0.3 per cent to $629,344

CANBERRA: Houses down 0.4 per cent to $1,070,403

HOBART: Houses up 0.1 per cent to $796,595

DARWIN: Units down 0.2 per cent to $369,806; houses up 0.8 per cent to $583,725

PERTH: Houses up 0.6 per cent to $582,550

BRISBANE: Houses up 0.8 per cent to $885,633

ADELAIDE: Houses up 1.9 per cent to $687,635

Source: CoreLogic data for median-priced houses and units in May 2022

But in Sydney, mid-point house prices fell by an even steeper 1.1 per cent to $1.404 million as apartment values dropped by 0.7 per cent to $829,598.

The upmarket Northern Beaches had Australia’s biggest drop of 1.9 per cent, in an area covering suburbs like Manly and Palm Beach where houses typically cost more than $4.5 million.

Sydney’s inner west had a 1.7 per cent decline, with houses in Birchgrove typically selling for more than $3 million.

The north shore and eastern suburbs both had monthly falls of 1.5 per cent, covering postcodes like Woollahra where $4.5 million is the mid-point price.

In Melbourne, house prices fell 0.8 per cent back into six-figure territory to $992,474 as unit values slipped 0.3 per cent to $629,344.

The city’s inner south, covering Brighton where the median house price is $3.9 million, suffered a 1.3 per cent drop.

Canberra house prices fell 0.4 per cent to $1.070 million.

Hobart’s equivalent house price rose by just 0.1 per cent last month to $796,595 and was flat in the three months to May.

CoreLogic research director Tim Lawless said affordability issues had turned off buyers as the banks raised fixed mortgage rates from historically low 2 per cent levels.

‘There’s been significant speculation around the impact of rising interest rates on the property market and last month’s increase to the cash rate is only one factor causing growth in housing prices to slow or reverse,’ he said.

‘Now we are also seeing high inflation and a higher cost of debt flowing through to less housing demand.’

But Mr Lawless is expecting regional property markets to continue thriving with median house prices outside capital cities last month rising by 0.5 per cent to $620,201.

In Sydney, mid-point house prices fell by an even steeper 1.1 per cent to $1,403,964 as apartment values dropped by 0.7 per cent to $829,598 (pictured is the Harbour Bridge from Dawes Point)

‘Arguably some regional markets will be somewhat insulated from a material downturn in housing values due to an ongoing imbalance between supply and demand as we continue to see advertised stock levels remain extraordinarily low across regional Australia,’ he said.

Last month, the Riverina area in southern New South Wales saw a 3.4 per cent increase followed by southern Queensland’s Darling Downs and Maranoa region which had a 3 per cent rise.

But he didn’t expect the boom in regional areas to last as higher interest rates affected affordability.

READ MORE VIA THE DAILYTMAIL

 

Don't be shy! Have your say....