Some investors were troubled as residential property prices declined 0.7% in the June quarter 2018. This, along with the first yearly drop in property value growth since 2012, was announced by Australian Bureau of Statistics (ABS) on Tuesday.
Data released by the independent statistical agency of the government showed that the dip was again driven by the country’s two largest cities. Sydney recorded the fourth consecutive quarter of falling property prices, down by 1.2%, while Melbourne saw its property values dropping 0.8%, marking the second quarter of price falls for the city.
ABS Chief Economist Bruce Hockman pinned the shift was on the credit slowdown.
"The initial slowdown in these markets was spurred by regulatory changes and a tightening in the supply of credit to investors. A drop in investor demand over recent months appears to be adding to the slowing in housing credit growth. The effect of this is more pronounced in the larger property markets of Sydney and Melbourne," he noted.
It’s worth giving a second look to the fact that the country recorded its first annual fall in terms of property value growth since the June quarter 2012. Over the year, the improvement in residential property prices trended lower by 0.6%.
Hobart grew significantly by 15.5%, while most capital cities have continued to record a moderation in annual growth rates since the September quarter 2017.
Further, property values in the capital of New South Wales slid 3.9% through the year. This marked recording the largest price fall since the March quarter 2009. Melbourne, meanwhile, was up by 2.3% but clearly slowed.
For reference, the overall value of Australia's 10 million residential dwellings dwindled $13.3 billion to $6.9 trillion. The mean price of dwellings in Australia is currently at $686,200.
