Property prices in Sydney are falling at the fastest pace in more than nine years, while prices in Melbourne are falling at the fastest pace in nearly six years.
CoreLogic data released on Monday showed a steady decline in house prices in Sydney as a result of persistent credit constraints and unaffordable prices, as well as an accelerated decline in Melbourne. The decline in the Australian housing market accelerated from 1.6% in July.
Sydney`s annual decline slightly expanded to 5.6 percent-the last time it was seen was in March 2009, when it was 5.4 percent. Melbourne`s decline accelerated, rising from 0.5 percent to 1.7 percent a year, marking its fastest decline since October 2012.
Kuser (Cameron Kusher), a research analyst at CoreLogic, said prices in Melbourne had been rising even as Sydney fell, suggesting that factors such as the credit crunch had now offset the strong growth in the city`s population.
"in Sydney and Melbourne, it`s hard to afford a house." Kuser told the Australian Financial Review.
"but it`s the credit crunch-people can`t borrow as they used to. They are more difficult to get financing, they have to more goods than three. Wages have not risen either. Even if a raise is offered, there is no money in the bag. They can`t afford more houses. "
The slowdown triggered by the credit crunch led to a bad start to the spring sales season, with the initial auction closing rate hovering below 60 percent over the weekend.
Kuser said that while there are signs that homeownership activity is weakening, the decline was concentrated in higher-priced markets a year after government introduced stamp duty breaks for entry-level buyers in New and Victoria.
"but we found that the low-end market has been doing better than the high-end market," he said. "that`s what you usually see in a downturn. In most economic downturns, the most expensive stocks fell the worst. "
In addition, the region with the biggest gains is suffering the biggest decline.
In the past 12 months, nine of the 10 worst performing areas have been in Sydney, with Ryde in Sydney`s North District hardest hit. Ryde`s house prices have fallen 9.4 percent over the past year, with independent homes down 11.8 percent. Flat units fell 2.4%.
Independent homes in Sydney`s urban and southern districts suffered the biggest decline, with apartments in 13%.Baulkham Hills / Hawkesbury having the biggest decline, to 16.2 percent.
The weak housing market last month also hit Hobart. Home prices in Tasmania fell 0.1 percent in August after flat in July, although still up 10.7 percent year-on-year.
"We are just beginning to see the pinnacle of the Hobart market," Kuser said. "Hobart was strong and more powerful than other state capitals. But now it has no advantage. It`s about the same price as Adelaide, and it`s not cheaper than Perth. "
Adelaide overtook Hobart by 0.3 percent a month, while Perth house prices fell 0.6 percent this month, down 2.1 percent a year.
House prices in Western Australia fell 1.9 percent, CoreLogic said. House prices in Brisbane fell 0.2% this month, but rose 0.9% year-on-year.
