According to CoreLogic’s data, the property prices in Sydney and Melbourne are falling at a fast rate.
Melbourne’s median home value slid 0.4% last week with a decline over the past month of 0.8%. Sydney’s median home value also declined by 0.5% a week earlier, falling by a further 0.3%, leaving the drop over the past month of 1.2%.
Since the start of this year, property prices in Sydney and Melbourne have now dropped 6.9% and 5.4% respectively.
Economists and policymakers concerned
Due to the fact that 40% of all Australian homes and 60% of Australia’s total housing wealth are located in Sydney and Melbourne, the property market downturn in these cities has gotten the full attention of economists and policymakers who are worried about the potential associated impacts.
RBA Governor Philip Lowe said in his speech last week that he was a bit concerned that lending standards are becoming too restrictive. He warned that the “economy will suffer” should current caution from lenders persist. The weakness in the property market may affect employment growth and household spending which in turn will negatively impact the country’s broader economic growth.
Total property listings in Sydney have increased by 19.2% and in Melbourne by 20.2% last week compared to the same corresponding week a year ago. However, since the demand is weak due to restrictive lending standards, vendors are lowering their prices just so they can secure a sale.
Nationwide decline seen
In October, CoreLogic reported Australia’s median home price fell by 0.5% that includes a 0.6% drop in the capitals. With the recent property price trends in the mainland state capitals, November could see a larger drop. These trends suggest CoreLogic’s Home Value Index may show a similar nationwide decline in prices when released in December.
Since the start of the year, Perth’s median value declined by 3.6% while Brisbane and Adelaide reported modest gains of 0.4% and 0.9% respectively. The average weighted price in mainland state capitals has now dropped to 4.9% year-to-date.
This article, “Sydney and Melbourne property prices falling at a fast rate”, first appeared on businessinsider.com.au.
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