The strong run in Darwin's property prices appear to be easing with the latest data from Residex showing house prices have drifted into the red for the first time in more than 12 months.
During the month ending February, median values fell by 0.83% to $501,500. Over the quarter to February, it only managed to gain a measly 0.83%. This is a significantly lower growth compared to the previous three months when it rose 3.14%.
The slowdown is also evident in other major capital cities with only the ACT and Melbourne racking up more than 1% gain in the month of February. Sydney barely managed to scrape through into the black with a 0.74% increase in median house values.
"The market is now softer than it was in September/October 2009," said John Edwards, CEO of Residex. "The impact of the RBA to increase interest rates has been more noticeable in Sydney but is a reasonable outcome given the higher cost of housing and the larger mortgage position for most when you consider that Sydney has been more expensive over a longer period. The momentum and confidence of Melbourne property buyers in a city which is growing strongly is likely to carry its growth phase for longer than in Sydney. However, both cities are exhibiting a slowdown as we move into winter."
In both capitals, Edwards noted that investors are active in the unit market and prices are moving forward.
"Darwin houses are at last taking a breather and the growth for the month was for the first time negative in more than a year. Its rental yield remains the highest of all capital cities and will cause further investor interest which will continue to drive prices but at a lower level given the cost of property which is now relatively high by comparison to the other opportunities," added Edwards.
