Property prices drop in most of Australia’s capital cities, including Sydney & Melbourne.
According to the CoreLogic Home Value Index, dwelling values decreased in 6 out of 8 Australian capital cities across the month of May 2017, with only the Brisbane and Adelaide markets posting nominal gains of 0.3% and 0.8% respectively.
May is generally a soft period for the Australian housing market, with combined dwelling values having fallen across this month during 4 of the past 5 years, but the magnitude of these falls has still prompted speculation that the market may finally be starting to cool.
This cooling may be partially attributed to broad investor & interest-only mortgage rate increases by the banks, following an increase in pressure placed onto them by the Australian Prudential Regulation Authority (APRA) over the last two years – including new restrictions on interest-only lending volumes announced in March of this year.
It may also be attributed to a decrease in consumer sentiment towards housing (with Westpac’s ‘time to buy a dwelling index’ having fallen 6.5% over the month), a reduction in market activity and increase in the number of property listings, and a slowing of auction clearance rates.
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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice.