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.