While research shows a continuing decline in the market since June 2018 for both house and other dwellings, a number of factors are pointing to a stabilising market, according to the latest research from the REIA.
REIA president Adrian Kelly said that property prices fell across Australia at the start of the year, with the weighted average median prices decreasing, with houses declining by 2.2 per cent and other dwellings by 1.4 per cent.
But he said that there are also a number of factors that suggest the market is beginning to right itself.
“With the election out of the way and no change in property taxation, a cut in official interest rates in June and the possibility of a further cut later this year, we should see the market, which is already showing signs that the rate of price falls is declining, stabilise,” Mr Kelly said.
“The rate cut, unlike the last series of cuts in 2015 and 2016 which stimulated investor activity, will benefit first home buyers who have seen their numbers decrease nationally to 23,403 in the March quarter 2019, down 19.7 per cent for the quarter and a decrease of 11.6 per cent compared to the corresponding quarter in 2018.”
Mr Kelly said the weighted average median price for houses for the eight capital cities decreased to $722,028 over the quarter, with prices decreasing in all capital cities, except for Adelaide and Darwin.
“The weighted average median price for other dwellings decreased to $568,584 over the quarter, with prices decreasing in all capital cities, except for Adelaide and Hobart.
“The quarterly decline in volume of both investor and owner-occupied finance of 20.7 per cent and 21.6 per cent, respectively, following the imposition of prudential controls by APRA and changes in banks’ lending criteria post the Hayne royal commission have contributed to this outcome.
“For owner-occupied finance, it’s the largest quarterly decline since March 2010, and for investor finance the largest decline since March 2004.
“Over the quarter, the median rent for three-bedroom houses increased or remained steady in all capital cities, except Darwin where there was a decline. The median rent for two-bedroom other dwellings also either increased or remained steady in all capital cities except Darwin.
“The weighted average vacancy rate for the eight capital cities decreased to 2.8 per cent during the March quarter, indicating a slight tightening of the rental market.”