Australia`s housing market is growing at an accelerated pace.
Prices across Australia fell for the 10th consecutive month in July, bringing the annual fall of 1.6 percent to 1.6 percent, the fastest decline since August 2012, according to CoreLogic data released on Wednesday. Home prices are down 1.9 percent from their September 2017 peak, but still higher than five years ago, 31%.CoreLogic said, due to prolonged declines in Perth and Darwin and faster declines in Sydney and Melbourne.
"We don`t see any factors that could prevent or reverse the subtle decline in the real estate market in the second half of 2018," said Laurence (Tim Lawless), head of research at CoreLogic. "the availability of housing credit is an important factor in this slowdown, but there are obstacles that slow the market."
Five of the eight state-run cities have seen median home prices decline in the past three months, with Melbourne and Perth having the biggest drop.
Sydney fell 1.1 percent to $863769, Melbourne fell 1.8 percent to $709568, Perth fell 1.5 percent to $457274, Darwin fell 1 percent to $439596, and Canberra fell 0.2 percent to $590229. Hobart was the best performing city, growing 1.1% to 435833 yuan. Brisbane rose 0.5 percent to 494634 yuan, while Adelaide rose 0.7 percent to 438163 yuan.
Rolex said the biggest decline occurred in the high-end market.
"the most obvious annual performance difference is in Melbourne, where the value of the most expensive 1/4 homes has fallen 4.1% in the past 12 months, while the cheapest 1/4 has risen 7.5%," he said. "similarly, in Sydney, Home prices in the most expensive 1/4 market have fallen 8 percent, while the market`s most rated 1/4 homes have fallen only 1.8 percent over the past 12 months. "
Differences between different price ranges in other capital cities have narrowed sharply, and CoreLogic said homebuyers supported demand in low-end markets last July after the introduction of stamp duty concessions in New and Victoria.
At the same time, new concerns about borrowers with high debt-to-income ratios could weaken the amount of money available to buy expensive homes. At the end of June, the house price-to-income ratio was 9.1 in Sydney and 8.1 in Melbourne.
"while the constraints are at play, sustained low mortgage rates will continue to provide a supportive buffer, which will help maintain the lower floor of housing demand." Said Laurie.
"homeowners continue to enjoy the lowest mortgage rates since the 1960s, and while investors pay about 60 points higher, interest rates in this market are still very low."
While higher financing costs may lead to higher mortgage rates, they need to rise more than 150 basis points to return to the 20-year average of 6.8 percent, he added.
Earlier, a number of major banks cut their forecasts for the Australian real estate market. National Bank (NAB) predicts house prices will calm by 2020, with Sydney down 6.5 percent from its peak and Melbourne down 2.5 percent.
Australian bank (ANZ) said it expects Sydney and Melbourne to fall about 10 percent from their peak over the same period. Oliver (Shane Oliver), chief economist at. AMP Capital, expects Sydney and Melbourne to fall 15 percent, with Australia down an average of 5 percent.
