SYDNEY, Sept 1 (Reuters) – Australian home prices fell for a fifth month in August as the housing downturn spread to more cities and regional areas, data showed on Tuesday, with the risk of more policy tightening pointing to tougher conditions ahead.
Figures from property consultant Cotality showed national home prices fell 0.9% in August from July when they dropped by a downwardly revised 1.2%. That left values 3.6% below their peak, but still 2.7% higher than a year ago.
Sydney and Melbourne again led the monthly decline with falls of 1.4% and 1.1%. Nearly all capital cities recorded a fall, with the heat finally coming out of boom markets like Brisbane and Perth, which fell 1.0% and 0.8% respectively after double-digit gains this year.
Cotality said the rate of decline in Sydney prices – down 7.1% from their peak in February – was now outpacing the earlier 2022-23 correction when the central bank raised interest rates by 425 basis points, which sent values down 6.6%.
“The softer trend in values is underpinned by weaker transaction activity,” said Tim Lawless, Cotality’s research director, adding that sales for the past three months were down 15.5% from a year earlier.
“Longer selling times, larger vendor discounting and persistently low auction clearance rates all point to a buyer’s market, yet buyers are lacking the confidence to transact at the moment,” he said.
A sustained slump in housing turnover would have wide implications for the economy given the housing sector’s extensive links to industries ranging from real estate services to tradespeople and construction. Housing credit growth has already started to slow.
However, there is little relief in sight for the sector after the government’s tax changes that have cooled investor demand. The Reserve Bank of Australia has raised the cash rate three times this year to 4.35%, and markets are fully pricing in another hike this year after a hot inflation print for July.
(Reporting by Stella Qiu; Editing by Jamie Freed)
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