- Australia capital city home prices fell by four per cent in the year to October 2011.
- Flat to lower house prices for the next six months or possibly the next 12 months.
Australia capital city home prices fell by four per cent in the year to October 2011, after a 0.5 per cent decline in the month. The median dwelling price in capital cities now stands at $448,500.
According to the latest RP Data, Brisbane led the national decline, with average home prices falling 7.5 per cent in the ten months to October 2011. Home values in Melbourne, Adelaide and Perth all declined 5.8 per cent, 4.4 per cent and 3.8 per cent over the same period, while Sydney remained relatively steady, with prices dropping by 1.4 per cent.
At the same time, regional home prices fell by 3.4 per cent.
All capital city home prices fell for the month of October 2011, except Sydney, which was unchanged, and Canberra and Hobart, which added 1.6 per cent and 3.1 per cent, respectively.
The national prices falls are being skewed by a retreat at the more expensive end of the market, according to Century 21, a national real estate group.
In Sydney, the market below $1.2 million was still very active. For Melbourne, the tumbling prices in 2011 followed several years of rapid gains, with values up by more than 25 per cent over the 18 months to June 2010 alone.
The outlook for housing may be improving, though, with new home sales up 5.5 per cent in October, according to Housing Industry Association figures out today. The increase marks a rebound from the 3.5 per cent slide in September 2011.
A decision by the Reserve Bank of Australia (RBA), which meets next week, to cut interest rates could provide much needed support for the market although I don’t think this is going to happen.
Even with lower interest rates, analysts predict prices will continue to slide in the months ahead, with Melbourne likely to see steeper falls than Sydney. It is possible that we will see flat to lower house prices for the next six months or possibly the next 12 months.
Some analysts are positive on the national outlook as they thought that Australia was to some extent immune from what was happening in Europe as Australia’s future is more closely linked to the growth of emerging world economies that need our resources. Even the growth rate of those emerging world economies slows down moderately, it would still allow growth in our economy in years to come.