Sydney and Melbourne home-price falls were fast-paced and drastic in December, and the trend is likely to continue in January, according to a report by Business Insider Australia.
Median home values in the country’s largest and most expensive property markets dropped to 1.8% and 1.5%, respectively. These declines reflected the overall fall of Australian capital city home prices in December— down by 1.3%, the largest one-month percentage fall since 1983.
CoreLogic predicted that price movements for January will be similar to December due to the unlikelihood of a lift in prices over the next few days.
CoreLogic’s daily Home Value Index showed that median prices in Sydney and Melbourne have slid 1.2% and 1.5%, respectively, so far during the month, including 0.3% and 0.4% drops in the past week.
In addition, median prices in Brisbane, Adelaide and Perth have also declined from December, ranging from 0.3% to 0.8% so far in January.
Overall, median values in Australia’s largest capital cities have decreased 1.1% so far this month in average weighted terms, extending the fall over the past year to 7.1%.
The annual decline, similar to the monthly data in January, was partly driven by the steep falls in Sydney and Melbourne, as well as continued losses in Perth.
Tighter home-loan lending standards have been a key reason behind the weak demand, together with other factors such as lower foreign investor activity and bleak expectations on prices. Supply, meanwhile, is another factor behind the drop in prices in Australia’s largest markets.
At present, there are 25,038 homes on the market in Sydney and 31,766 in Melbourne, up 23.7% and 34.1%, respectively, from the levels in the previous year. The clear growth despite a sharp drop in new property listings in both cities over the same period implies weak demand.
Most other Australian capital cities are in the same boat, with more properties sitting on the market despite a decline in new listings.
Hobart was the only exception, with its new listings increasing compared to data recorded from a year ago.