According to the Australian Bureau of Statistics’ (ABS) latest Residential Property Price Indexes, the total value of Australia’s 10 million residential dwellings declined by $22.5 billion to $6.9 trillion in the March quarter, with the mean price of national dwellings now sitting at $687,700.
Over the March quarter, property prices fell by 0.7 of a percentage point nationwide (2.0 per cent year-on-year), driven by price falls in the country’s largest cities, with Sydney’s values slipping by 1.2 per cent and Melbourne’s prices dropping by 0.6 of a percentage point.
“Sydney recorded the third consecutive quarter of falling property prices (1.2 per cent) and the first annual price fall (0.5 of a percentage point) since the March quarter 2012, while Melbourne property prices fell [by] 0.6 [of a percentage point], the first quarterly price fall since September quarter 2012,” ABS chief economist Bruce Hockman said.
Mr Hockman attributed the drop in home values to tighter credit conditions imposed by the Australian Prudential Regulation Authority (APRA).
“Regulatory changes and tighter lending conditions have continued to affect investors, who are more active in the Sydney and Melbourne property markets. These cities have seen strong price growth over recent years, particularly in detached dwellings,” the chief economist continued.
Home values also dropped in Darwin (1.1 per cent), Perth (0.9 of a percentage point) and Brisbane (0.6 of a percentage point).
Conversely, Hobart reported the largest spike in home values over the March quarter (4.3 per cent), with Canberra (0.9 of a percentage point) and Adelaide (0.5 of a percentage point) also reporting increases.
Mr Hockman attributed the continued uplift in Hobart’s home values to positive economic conditions in Tasmania.
“Positive economic conditions in Hobart, such as solid jobs growth, rising employment and an increase in net interstate migration, are underpinning demand for property,” the economist said.
“Hobart has continued to experience consistently tight housing supply, which is leading to a strong rise in residential property prices.”