According to CoreLogic, house prices for eight capital cities have declined by 0.2% in May, following a 0.3% decline in April because of the softening Sydney and Melbourne prices. In 2017, the eight capital city hedonic index was down by 1.1% while regional prices increased by 0.2% in May and about 2.2% in annual terms.
National house prices in aggregate declined by 0.1% and 0.4% in annual terms. In 2017, Sydney prices were down by 4.2% while Melbourne prices were up by 2.2%. Brisbane, on the other hand, recorded +0.9% as Adelaide recorded +0.6%. It remained dismal for Perth prices, however, which were down by 1.9%.
Hobart was the only capital city where house prices increased by 12.7% in annual terms in May. Meanwhile, Darwin prices declined by 7.9% because of the adjusting over-supplied market but Canberra prices increased by 2.3%.
APRA will lift the 10% investor lending cap effective 1 July subject to maintenance by Approved Deposit-Taking Institutions of lending standards and six months of running under the cap.
Melbourne prices were down in hedonic terms by 1.2% in three months to May while Sydney was down by 0.9%. However, it may not be so bad because Sydney and Melbourne have experienced even greater price falls in the past with a 7.1% decline for Sydney and 3.3% for Melbourne.
Surprisingly, unit prices continue to attract support in Sydney and Melbourne because of affordability and population. Median sale prices of Sydney units have declined by 2.8% year to year, doing better than houses which declined by 8.6%. Melbourne unit prices increased by 5.8% with house price gains of 6.2%.
Time to sell has increased in Sydney while Time to sell for Melbourne, Brisbane and Adelaide have been steady. Perth and Darwin sale periods have shortened, showing positive buyer interest. Most capitals recorded steady to higher rental rates, which was stronger in Hobart but softer in Darwin markets.
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