Home values have dropped by more than one per cent, following lower consumer confidence in May.
According to RP Data-Rismark’s latest capital city Index, dwelling values dropped 1.2 per cent in May.
The fall comes just one month after values fell 0.5 per cent in April.
According to RP Data national research director Tim Lawless, the weak May result and the fall in consumer confidence over May and June could be attributed to a growing level of uncertainty about domestic economic conditions and could possibly be a sour reaction by consumers to the federal Budget announcements in mid May.
“The RP Data-Rismark daily index tracked higher from late April through to May 10, and then went into a consistent decline over the remainder of the month," he said.
“How much of this downwards pressure can be attributed to the lower confidence reading is anyone’s guess, but the correlation of housing market conditions with consumer confidence is a strong one.”
Mr Lawless said if confidence levels remained at low levels, there was likely to be a similar dampening effect on the housing market.
The indices results showed that all the capital cities, apart from Perth and Hobart, recorded a fall in values over the month, with half of the capital cities recording a fall in values over the quarter.
Melbourne was one of the weakest performers, according to Mr Lawless.
“With Melbourne dwelling values down by 2.1 per cent over the month and 1.9 per cent over the last three months, the pull-down effect on the aggregated index has been substantial,” he said.
The RP Data-Rismark analysis of rental markets showed weekly rents across the combined capital cities were up 3.1 per cent over the past 12 months.
Darwin and Perth were continuing to record the highest rate of rental growth, with Darwin rising 9.5 per cent and 9.6 per cent for houses and units respectively, and Perth rents up 8.9 per cent and 8.3 per cent over the year.