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The latest Domain House Price Report for the June quarter has found consecutive interest rate cuts, the regulatory changes to lending and no changes to negative gearing boosting overall market sentiment.
While median house prices continued to fall across most major markets, Melbourne, Hobart and Canberra all saw a slight increase over the June quarter.
For units, the price decline had slowed for most major markets, but only Melbourne saw a price increase, at 2 per cent, over the quarter.
Sydney
House prices in Sydney fell by 0.4 of a percentage point in the quarter, signalling a slowdown for prices, and while the median price remains over $1 million, it is still 14 per cent below the 2017 peak.
Unit prices also fell by 0.4 of a percentage point over the quarter and are down by 7.1 per cent over the year.
This brings prices back to early-2016 levels and units back to mid-2015 levels, still making the city the most expensive to buy in the country.
The slowing price falls and other indicators suggest the market is bottoming, with auction clearance rates averaging 68 per cent, a level historically aligned with modest annual price growth.
Melbourne
Melbourne’s rise in units and homes signals that the downturn may be at an end, as houses rose for the first time since December 2017.
The median house price is now just 10 per cent below the 2017 peak at $818,200 after a 0.3 of a percentage point rise in the quarter.
Melbourne’s most expensive areas have seen the biggest house prices falls, with the inner east and inner west falling by 16 per cent and 13 per cent, respectively.
This seems to be on the turnaround though as its auction clearance rates are the strongest in the capital, suggesting that the market may be nearing the bottom, according to Domain.
Brisbane
Brisbane continued to fall with a 1.4 per cent drop in median house prices and a 3.1 per cent drop for unit prices.
Tighter lending conditions and the apartment construction boom have weighed down on property prices for the city, but strong population growth has meant the correction in unit prices was not as severe as predicted.
Adelaide
Adelaide’s medium house price fell for only the second time since 2014, but by the very modest margin of 0.1 of a percentage point.
Unit prices fell over the quarter were down by 0.6 of a percentage point over the year, despite unit price growth being weaker than house price growth.
Perth
Perth properties have continued to fall, with house prices falling by 2 per cent in the June quarter and unit prices falling by 1.6 per cent.
Perth prices have been dragged down by sluggish population growth and a slowing economy due to the end of the resources boom.
Population growth is now picking up and the mining outlook is stronger, that together with low interest rates could indicate price falls may be close to ending.
Hobart
Hobart’s property price boom looks to be ending as its house prices had the smallest annual increase since 2016, with a 0.7 of a percentage point increase over the quarter.
Hobart does still remain the most affordable capital city to buy a house, with price growth only set to increase modestly in the year ahead.
Unit prices fell again in June and were down by 1.5 per cent over the year but are still 24 per cent above where they were in 2016.
Canberra
Canberra’s median house price jumped by 1.5 per cent in the June quarter, with all regions bar North Canberra seeing a rise.
Unit prices fell over the quarter but rose by 1.9 per cent over the year to sit at $448,700, with prices held down by record rates of construction.
The recent federal election is expected to give Canberra property a boost in combination with strong population growth and low unemployment.
Darwin
Property prices in Darwin continue to fall, with a 2.3 per cent drop in house prices and a 10.4 per cent drop in unit prices over the quarter.
The median house now sells for $502,500, the second cheapest of all the capitals, while units have become the cheapest across the capitals.
Prices will continue to fall further this year as a declining population, slowing economy and the end of the mining boom continue to have an effect.
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