House prices have dipped further according to new data
House prices across the nation have continued to fall despite the spring selling season getting underway.
Prices have fallen by 0.06 per cent nationally, with a 0.11 per cent drop in Australiaâs capital cities according to PropTrackâs Home Price Index, the smallest fall since the March peak.
Hobart and Canberra led the declines with 0.46 per cent and 0.37 per cent dips respectively, followed by Sydney at 0.21 per cent.
But the dip isnât a reason to panic according to property experts, with prices still up 30.2 per cent when compared with pre-pandemic levels.
âEven though weâve moved into the next phase sooner than expected as the Reserve Bank lifts interest rates, itâs important to put into context what weâve seen in the past couple of years,â report author and senior PropTrack economist Eleanor Creagh said.
âWe have seen that the pace of price calls has moderated significantly with spring selling season underway.â
Sydneyâs house prices are 22.8 per cent higher than they were in March 2022, while Brisbane has experienced a 44.2 per cent boost and Melbourne a 15.8 per cent lift.
The decline in prices as interest rates rise should not cause anxiety for homeowners, UTS Professor of Finance Professor Harry Scheule said.
âA panic would be overstated, I donât think there should be panic,â he said.
Despite further projected declines in property prices across the country, there should be no expectation that the cost of a home will fall below pre-pandemic levels according to UNSW property and development lecturer Dr Rotimi Abidoye.
âWe shouldnât expect the 30.2 per cent rise to be wiped off the market just like that, it wonât just go back to where it was pre-pandemic,â he said.
The median value of a home in Australiaâs capital cities currently sits at $792,000, while Sydney and Melbourne sit at $961,000 and $805,000 respectively.
âI donât think the market will crash, because the things that cause a market crash arenât really happening, the banks are still lending reasonably and people have jobs,â Dr Abidoye said.
âThere will definitely be some mortgage stress, there will be people who donât make it out with their property, thereâs no doubt about that, but the percentage wonât be high.â
The current housing situation can be described as a âmarket correctionâ according to Professor Scheule.
âCurrently the Australian economy is strong, weâve got a historically low unemployment rate and whatâs going on with interest rates and house prices is being offset with a strong economy,â he said.
With predictions that the RBA will lift the cash rate by another 50 basis points in the next few months, more significant declines in Australian house prices should be expected next year, according to Prof Scheule.
âDefinitely expect declines in 2023, but the expectation is that it will stabilise in 2024,â he said.
âThere will be more significant declines, and that wonât be spread across the nation evenly.
âDecline will be worse in areas that have seen high increases, in the capital cities of Sydney and Melbourne.â
Regional areas of the country have bucked the downward trend, rising by 0.06 per cent in the past month, and 6.49 per cent annually.
Compared to March 2020, prices in regional areas have exploded by 46.6 per cent, with the highest increases in regional Tasmania with a 55.3 per cent boost and in regional NSW where prices have lifted by 48.6 per cent.
âDemand for more affordable homes has resulted in regional areas being boosted,â Ms Creagh said.
Article Credited to Eli Green, news.com.au
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