Dwelling values dropped the furthest in six years in May, new data shows, although there are signs the worst has passed.
According to the RP Data-Rismark Home Value Index, dwelling prices have fallen 2.2 per cent in the five months to May, and are 5.3 per cent down on where they were 12 months ago.
Detached house prices have eased the most, down 5.8 per cent over the year, while unit prices were 1.5 per cent softer.
The latest RP Data figures show Adelaide was the only capital to buck the trend by recording a monthly increase in median dwelling prices of 1.2 per cent.
Melbourne’s dwelling prices slid 2.7 per cent in May (and 8.4 per cent weaker on-year) followed by Darwin at 2.4 per cent, while the value of properties in Perth eased by 1.7 per cent. Sydney’s prices were down 1.2 per cent on-month – or 3.6 per cent on year – while the Brisbane/Gold Coast area saw prices drop 0.4 per cent on-month, Canberra was down 1.5 per cent, and Hobart’s values fell 1.2 per cent.
CEO of RP Data, Graham Mirabito, said the latest statistics suggest the property market is bottoming out.
“We did see Australian [property prices] slip overall by 5.3 per cent from the beginning of the year. What we’re seeing is the overhang of too much stock on market from the end of last year,” he said.
“What we had was around 23 per cent more stock on market from the year before. The total stock on market now is around nine per cent higher than this time last year, so that’s good that stock is starting to deplete.
“And price discounting has dropped from 7.9 to 7.1 per cent.
“So they're all lead indicators to say the market is starting to bottom out.”
Mr Mirabito added there will be considerably more strength from affordable and middle tier housing, but it’s not the same story for luxury homes.
“Inflation is relatively under check at around three per cent. People are being paid more. So affordability is up, and the affordable market and the mid-market will continue to be reasonably solid, while the top end will struggle. “
He also claimed that recent Reserve Bank decision to slash the official cash rate is not yet reflected in the data.
“You won’t see that in these numbers because that takes three or four months to flow through. I saw yesterday that Westpac are forecasting even more drops.
“I think the spring season is the one to watch, our August - September season.
“That’s a time of the year where most Australians list their properties for sale. So I think that’s where we’ll see the positive impact of that. And then if the government brings forward some stimulus for first home buyers and those sorts of things, I think that’s when we’ll see some things happening.”