Sub $400k home sales falling despite price drop

The latest CoreLogic research has revealed that despite an overall fall in national dwelling values of 0.8 of a percentage point in the 2018 financial year (FY18), compared to an increase of 10.2 per cent in the previous year, sales of the most affordable homes are dropping.

Sales of dwellings with a value of less than $400,000 have declined nationally to 29.2 per cent of all houses and 34.6 per cent of all units in FY18.

The CoreLogic research revealed that when analysing trends across Australia’s combined capital cities, sales of homes below $400,000 were at a historic low of 13.9 per cent for houses and 25.8 per cent for units in FY18.

Since the start of the 2018 calendar year, the share of sales below $400,000 slipped from 16.2 per cent of houses and 27.1 per cent of units.

Commenting on the results, CoreLogic’s research analyst, Cameron Kusher, said that with home values in Sydney and Melbourne continuing to drop, a reversal in such a trend is unlikely.

CoreLogic’s latest Hedonic Home Value Index revealed that over the past year, Sydney’s property prices have fallen by 5.4 per cent while Melbourne’s values have dipped by 0.5 of a percentage point.

“With values now falling in Sydney and Melbourne, it is unlikely to initially result in an increase in sales under $400,000. However, should it continue for a number of years, we may finally see a reversal of the declining trend in sales under $400,000.”

[Related: Property prices falling fast and downturn fathers speed]