The latest news from the Australian Bureau of Statistics has alarming implications for property owners and investors.
And it doesn’t look like we’ve seen the worst yet.
Housing prices in capital cities across the country fell by 2.4% in the three months leading up to December — ultimately trimming housing values to $6.7 trillion.
Which is good news for buyers hoping to strike a good deal, but a nightmare for sellers, who were once looking at an extremely tidy profits from their family homes.
Overall, according to the Australian Bureau of Statistics’ Residential Property Price Index, released on Tuesday, housing fell nationally by 5.1%.
Don’t say we didn’t warn you.
Down, down, down…
This result brought the total value of Australia’s 10.3 million dwellings down by $133 billion over the quarter — following the stinging decline of $70.1 billion in the September quarter.
And as predicted, Melbourne and Sydney were hit the worst, with predictably more to come.
ABS chief economist, Bruce Hockman, said of the drops,
‘While property prices are falling in most capital cities, a tightening in credit supply and reduced demand from investors and owner occupiers have had a more pronounced effect on the larger property markets of Sydney and Melbourne.’
Sydney experienced the hardest drop in the December quarter — falling by 3.7%. Melbourne wasn’t too far behind, recording a 2.4% fall in their prices.
However, prices actually increased during the period — by 0.1% in Adelaide, and 0.7% in Hobart.
Future of Australia’s housing sector revealed
While the ABS report depicted 42,600 new residential properties were added to the total stock during those three months, the mean price of housing still fell by $15,700 during that period — to an average price of $651,100.
A lot has happened over the last 12 months.
Sydney has seen a drop of 7.8% over the last year, Melbourne recorded a $6.4% fall, Darwin a 3.5% drop, and Perth 2.5%.
According to AAP, this now brings the average price of a residential property in NSW to $831,800, Victoria to $690,900, and ACT to $655,600. Tasmania sits at the lowest, of $411,700.
Brisbane survived the hit, decreasing by only 0.3% during the year. However, they experienced a 1.1% drop during the December quarter.
BIS Oxford Economics have called Brisbane’s drop ‘concerning’ as prices were flat for most of the year.
So, where does that leave us? What can we expect now, whether we’re buying, selling, or holding onto our investments?
Well, seeing as we’re not seeing any slowing up of these trends, it looks like we’ll be waiting out this storm for a while longer.
In the meantime, we’ll have our ears to the ground with this topic.
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