RP Data’s daily house price index for 31 May was released over the weekend, which has enabled me to calculate monthly price movements for the five major capital city markets.
As shown below, home values at the 5-city fell sharply (-1.91%) in May, driven by a big 3.59% fall in Melbourne, although all major markets experienced losses:
It was the first monthly decline in values since the same month last year, with May’s fall also the biggest since the daily index commenced in January 2012:
Values at the 5-city level have now increased by only 1.90% since the beginning of the year, with all major capitals, except Perth, gaining:
Over the past 12 months, values have risen by 10.87% at the 5-city level, with gains across all major markets:
Prices at the 5-city level are now 5.6% above their 2010 peak in nominal terms, with Sydney, Melbourne and Perth in positive territory, and Brisbane and Adelaide still below their former highs:
Personally, I wouldn’t draw too many conclusions from this month’s weak result. April and May are generally seasonally weak months, and this year’s combined fall of 1.59% over April and May is smaller than the 1.67% fall recorded over the same period in 2013 and the 2.06% fall recorded in 2012.
Further, the single best predictor of house price growth – total housing finance commitments – continues to register positive annual growth, which points to continued house price gains. Once this indicator turns south, the chances are house prices will too. But we are nowhere near there yet.
