The latest property data from CoreLogic has revealed a national fall in property prices in capital cities across the country.
The Home Value Index for May 2017 showed a month-on-month decline of 1.1 per cent for home values across the combined capitals, however it should be noted that prices are still 8.3 per cent higher than they were a year ago.
The recent declines may be due to factors such as regulatory changes introduced by the Australian Prudential Regulation Authority (APRA) and rising mortgage rates from lenders.
Looking at each capital, Sydney property prices were down by 1.3 per cent for the month, however still 11.1 per cent higher than the same time last year.
Melbourne’s property prices fell by 1.7 per cent, although they are up by 11.5 per cent year-on-year.
Hobart saw the biggest fall in prices in May, down by 4.8 per cent, followed by Darwin at 3.5 per cent.
Canberra saw a minor decrease in prices of 0.1 per cent, as did Perth with a fall of 0.4 per cent.
Brisbane and Adelaide were the only capitals to see price increases for the month, up by 0.3 per cent and 0.8 per cent, respectively.
According to CoreLogic Head of Research Tim Lawless, May has historically been a weak month for property growth.
“The May home value results should be viewed in the context of demonstrated seasonality; values have fallen during May in four of the past five years. Reading through the seasonality indicates that value growth in the market has lost momentum, particularly in Sydney and Melbourne where affordability constraints are more evident and investors have comprised a larger proportion of housing demand,” Mr Lawless said.
“Another factor that is likely contributing to slower growth conditions is a dent in consumer confidence. Consumer sentiment towards housing, as measured by Westpac and the Melbourne Institute, has shown a marked downturn in May,” he said.
“In particular, the Westpac ‘time to buy a dwelling index’, fell 6.5% over the month. According to Westpac, ‘consumer sentiment towards housing shows an increasingly negative view.”
What’s ahead for the property market?
While these latest figures may look disheartening, it is still too early to tell whether this data represents a slowing market or simply a slow month.
The Sydney and Melbourne property markets may not have run out of steam just yet, but it will be well worth keeping an eye on property data in the coming months to see if the current data becomes a long-term trend.