CoreLogic’s latest Hedonic Home Value Index has revealed that property prices declined by 0.5 of a percentage point nationwide in October, led by a 0.6 of a percentage point fall in combined capital city home values and a 0.2 of a percentage point drop in combined regional home values.
CoreLogic reported that the sharpest decline across Australia’s capital cities was in Perth, where prices dropped by 0.8 of a percentage point, followed by Sydney and Melbourne, which both reported October declines of 0.7 of a percentage point.
CoreLogic also reported that Hobart and Adelaide were the only capitals to report a rise in home values, which increased by 0.9 of a percentage point and 0.2 of a percentage point, respectively, while property prices in Brisbane, Darwin and Canberra remained stable in October.
When analysed on an annual basis, Sydney’s property prices have taken the biggest hit, dropping by 7.4 per cent, followed by Melbourne (4.7 per cent), Perth (3.3 per cent) and Darwin (2.9 per cent).
Conversely, CoreLogic noted that the largest increase in property prices over the 12 months to October 2018 was in Hobart (9.7 per cent), followed by Canberra (4.3 per cent), Adelaide (1.8 per cent) and Brisbane (0.4 of a percentage point).
Combined regional values also increased year-on-year, rising by 0.8 of a percentage point.
However, overall, national home values slipped by 3.5 per cent in the year to October 2018, which CoreLogic’s head of research, Tim Lawless, said was the weakest result since February 2012 and attributed the market downturn to tighter credit conditions.
“With such broad-based weakness in housing market conditions, it’s clear that tighter credit availability is acting as a drag on housing demand and impacting adversely on the performance of housing values across most areas of the country,” Mr Lawless said.
According to CoreLogic, the national median home value has now slipped to $538,668.
CoreLogic’s research coincides with Dwelling Approvals data form the Australian Bureau of Statistics (ABS), which reported that, when seasonally adjusted, housing approvals dropped by 14.1 per cent in the year to September 2018, driven by a 7.5 per cent fall in house approvals and a 21.9 per cent decline in apartment approvals.
According to an ANZ analysis of the ABS data, the fall in approvals is set to continue.
“We expect approvals to continue trending lower in the near term, given that the tighter credit conditions facing developers and new home purchasers are likely to continue.”