Housing market slows

Real estate market continued to cool in May, after house prices in capital cities recorded their second straight month of single digit growth in May. The RP data-Rismark Hedonic Home Value Index grew by a seasonally adjusted 0.5 per cent in May, up a touch from the 0.2 per cent recorded in April.

April’s near flat result followed 16 months of strong house price growth. In the year to May, house prices in capital cities grew by 12.1 per cent. “This second consecutive month of single-digit annualised gains sends a signal that the double-digit growth rates recorded since January 2009 are behind us,” RP Data’s director of research Tim Lawless said.

“The signposts have been in the market for several months now with lower auction clearance rates, fewer housing finance commitments and weakening consumer confidence.” On a city by city basis, home values rose 2.4 per cent in Sydney, while 3.3 per cent per cent growth was recorded in Melbourne.

Home values in Canberra grew 3.7 per cent, while in Brisbane they grew 0.8 per cent and values were up 2.3 per cent in Adelaide. Home prices fell 2.1 per cent in Perth and one per cent in Hobart.

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