house prices


PHOTO: Australian Property

It would be easy to get excited and think now is the right time to jump into the housing market. This is why you need to be careful.

You might have heard rumours that the housing market is about to take off, that the price falls are finally over and that the time to buy is now.

It would be easy to get excited, grab your deposit and finally dive in. But is it still too soon? Be careful.

Because there are some tentative signs that in Sydney and Melbourne, house price falls are back. Earlier this year the fall in house prices was easing. But the newest data shows price falls seem to have intensified again at the end of April/start of May.

The next chart uses a daily home value index created by CoreLogic. As you can see, the speed at which house values are falling has varied. At one point values in Sydney were falling so fast that if it was maintained for a year, values would be down by 25 per cent. At other times they were falling at a rate equivalent to annual falls of just a few per cent.