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 Australia‘s capital cities according to PropTrack’s 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 isn’t a reason to panic according to property experts, with prices still up 30.2 per cent when compared with pre-pandemic levels.
“Even though we’ve moved into the next phase sooner than expected as the Reserve Bank lifts interest rates, it’s important to put into context what we’ve seen in the past couple of years,” report author and senior PropTrack economist Eleanor Creagh said.
“We have seen that the pace of price calls has moderated significantly with spring selling season underway.”
Sydney’s 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.
“A panic would be overstated, I don‘t think there should be panic,” 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.
“We shouldn’t expect the 30.2 per cent rise to be wiped off the market just like that, it won’t just go back to where it was pre-pandemic,” he said.
The median value of a home in Australia‘s capital cities currently sits at $792,000, while Sydney and Melbourne sit at $961,000 and $805,000 respectively.
“I don’t think the market will crash, because the things that cause a market crash aren’t really happening, the banks are still lending reasonably and people have jobs,” Dr Abidoye said.
“There will definitely be some mortgage stress, there will be people who don’t make it out with their property, there’s no doubt about that, but the percentage won’t be high.”
The current housing situation can be described as a “market correction” according to Professor Scheule.
“Currently the Australian economy is strong, we’ve got a historically low unemployment rate and what’s going on with interest rates and house prices is being offset with a strong economy,” 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.
“Definitely expect declines in 2023, but the expectation is that it will stabilise in 2024,” he said.
“There will be more significant declines, and that won‘t be spread across the nation evenly.
“Decline will be worse in areas that have seen high increases, in the capital cities of Sydney and Melbourne.”
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.
“Demand for more affordable homes has resulted in regional areas being boosted,” Ms Creagh said.
Article Credited to Eli Green, news.com.au
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