Residex has released its house and unit price results for February, which revealed a 0.70% rise in Australian house values over the month but a 0.76% decline in unit values. Over quarter, house values fell by 0.04% whereas unit values declined by 0.32%. And over the year, house values rose by 6.14% whereas unit values increased by 5.27% (see below table):
According to Residex’s (On-the-House’s) Market Analyst, Eliza Owen, the housing market is experiencing a slowdown:
The latest data and analysis of the Australian housing market reveals an overall subdued or negative performance across the country. This is a likely result of a combination of things – such as restricted access to finance and sluggish economic performance, which in turn affects purchasing power and the confidence of buyers…
Historically, it is common that the February quarter sees subdued growth that is below the long term average, however it is unusual to see a negative result. Quarterly growth in the Australian house market was -0.04% overall in February, while the unit market suffered a loss of -0.32%
Of the 32 major housing markets displayed in Table 1, 18 slipped into negative growth for the quarter. Of the markets that achieved positive quarterly growth, it was mostly subdued rates of less than 1%.
Interestingly, Sydney, Melbourne and Brisbane saw a reduction in median house values in the February quarter. This is likely the result of tightened access to home loans, which has encouraged a more rapid onset of the downswing in the east coast markets…
It is likely that a higher portion of incomes are going to rent and mortgage repayments, given the exorbitant increase in a large number of dwellings across Australia – most of which are concentrated in Melbourne and Sydney.
All of this serves to slow down spending, which in turn slows down economic activity. For this reason, we may expect Australia’s housing markets to finally catch up with Australia’s subdued economic position.
