Drop in consumer confidence is eating away at house prices

Australian House Prices have stopped their climb in April, with some capital cities recording a drop and others just marginal gains.  The RP Data-Rismark Hedonic Home Value Index released yesterday showed national average growth for dwellings of 0.2 per cent, after a 1.3 per cent rise in March. Tim Lawless, research director for property analyst firm Rpdata.com, does not believe that these figures are representative of a property market crash. “We are on a cusp in seeing a change of market conditions,” Mr Lawless said.

Nationally, prices for all homes — houses and units — have grown 4.6 per cent this year and are up 11.9 per cent for the year to April, with the median home price now $460,000. Houses in capital cities rose 11.6 per cent for the year to April, more than double the 5.6 per cent rise for houses outside the cities. During April, the average price for all dwellings fell 1.2 per cent in Brisbane, 0.9 per cent in Perth and 0.3 per cent in Darwin.

Sydney staged price gains of 0.3 per cent, Melbourne and Adelaide 0.8 per cent and Canberra 0.6 per cent. There have been a wide range of indicators that a property market slowdown was ahead, including a drop in auction clearance rates, fewer home loan approvals and lower consumer confidence. This was compounded by the fact that the market has seen significant price gains since the beginning of last year and was weighed down by several consecutive interest rate increases.

If there is anything that we can be absolutely certain of it is that we are not about to experience a housing boom in Australia.

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