According to CoreLogic’s latest Hedonic Home Value Index, property prices dropped by 0.7 per cent nationwide in November, the weakest month-on-month change since the global financial crisis (GFC), with national values now down 4.1 per cent year-on-year.
The national decline was driven by a 0.9 per cent fall across Australia’s combined capital cities, with combined regional values dropping by 0.1 per cent.
Sydney and Melbourne have continued to drive the slump in home values, with drops of 1.4 per cent and 1 per cent, respectively, with prices also dropping in Perth (0.7 per cent).
CoreLogic head of research Tim Lawless noted: “The downwards pressure on national dwelling values is largely confined to Sydney and Melbourne, which together comprise approximately 55 per cent of the value of Australia’s housing asset class.”
However, Mr Lawless added that conditions across the Australian housing market are “increasingly diverse”, with five capital cities recording an increase in home values.
The data revealed that in November, home values increased by 0.7 per cent in Hobart and Darwin, 0.6 per cent in Canberra and 0.1 per cent in Brisbane and Adelaide.
“Hobart and regional Tasmania continue to be the standouts for capital gain, with values up 1.7 per cent across both regions over the past three months,” Mr Lawless observed.
CoreLogic has reported that the national median home value now stands at $535,481.
Dwelling approvals down but construction ‘holding up’
The CoreLogic research coincides with the latest Dwelling Approvals data from the Australian Bureau of Statistics (ABS), which has revealed that in seasonally adjusted terms, approvals fell by 1.5 per cent in October and 13.4 per cent year-on-year.
“The trend for total dwellings has been steadily declining over the past 12 months,” Justin Lokhorst, director of construction statistics at the ABS, said.
“The decrease in October was mainly driven by private sector dwellings excluding houses, which fell 1.8 per cent. Private sector houses also declined, by 0.5 per cent.”
However, according to an analysis from Master Builders Australia chief economist Shane Garrett, new home building “held up well” over the September 2018 quarter.
Reflecting on ABS construction data, Mr Garrett noted that new residential building work eased by 1.8 per cent during the quarter but was 4.7 per cent higher than a year earlier.
“Surprisingly, the apartment/unit side of the market put in a strong performance and came close to surpassing its busiest quarter on record. Work on detached houses fell by 3.2 per cent compared with the previous quarter,” Mr Garrett said.
“The performance of residential building has proven more resilient than expected in light of the unfolding credit crunch and less favourable conditions in Australia’s largest housing markets.
“Going forward, we do expect the tougher financial environment to take its toll on the volume of new home building over the next few years. Larger apartment projects will probably see the biggest reduction.”
The ABS construction figures also found that non-residential building declined by 2.4 per cent during the September 2018 quarter and that engineering construction fell by 4.5 per cent.
“With the federal budget set to be delivered earlier next year, it is important that it includes measures to support our sector’s capacity to meet the building needs of a steadily growing population,” Mr Garrett concluded.