Average median house prices have experienced their largest quarterly fall in value in five years, according to the Mortgage Choice REIA Real Estate Market Facts report, which revealed a drop in prices from $471,300 in the December 2007 quarter to $458,488 in March 2008.
The decline in values represents a decrease of 2.7% over the quarter.
Only two capital cities, Sydney and Perth, now have a median house price above $450,000, as opposed to four capital cities in the December quarter. While Sydney has the highest median house price, Melbourne has the highest median price for other dwellings (flats, units and townhouses), as it did in the December quarter. Hobart remains the cheapest capital city in which to buy property.
REIA president Noel Dyett said the fall in median prices is “not surprising” following recent interest rate rises by the Reserve Bank to help curb inflation, accompanied by additional lender-imposed rate increases. He said the result wouldn’t do much to boost consumer confidence among investors and homeowners who are already struggling with current market conditions.
“Unfortunately, investors, as well as owner-occupiers, are showing reduced levels of confidence,” he said.
“Renters will find it increasingly difficult to obtain rental accommodation at an affordable price until there’s more stock on the market and more investors willing to buy property.”
Warren O’Rourke, national manager of corporate affairs with Mortgage Choice, added that the quarterly result is good news for those looking to buy.
“Any Australian repaying a mortgage or considering entering the market should be aware of the wide range of housing finance options available to ensure they have the most suitable loan for their current needs and lifestyle,” he said.
Brisbane, Adelaide and Hobart were the only cities to record a slight improvement in vacancy rates during the March quarter. The continuing shortage of rental properties has resulted in rent rises in the March quarter in all capital cities for three-bedroom houses and two-bedroom other dwellings. Darwin has the tightest rental market with a vacancy rate of only 0.5%.
The most significant increases in rent for houses over the quarter were recorded in Darwin (8.9%), Brisbane (6.7%) and Hobart (5.4%). For other dwellings, the most significant increases were recorded in Hobart (6.5%) and Melbourne (5.4%). Median house rents in Darwin recorded a massive 44.1% increase over the year, while rents for other dwellings increased by 33.9%. Darwin is the most expensive rental location in the country, while Adelaide is the cheapest.
