The CoreLogic home value results in July confirmed a weakening market for properties in Australia, with both capital city and regional property values decreasing over the past three months. Melbourne property prices and Sydney property prices saw some of the country’s biggest downturns, falling by 0.9% and 0.6% respectively.
But is the outlook all doom and gloom? Experts say the seemingly steep fall in house prices was to be expected after a long and significant boom in property prices.
Alan Olster, NAB’s chief economist, told Domain that fears over weakening house prices could be allayed by seeing the bigger picture.
“People say ‘well it could fall 10 per cent’… Well, yes but it’s still 30 per cent above where it was two years ago,” Oster said.
CBA senior economist Gareth Aird also believes that falling property prices are relative to significant growth over the past five years – meaning the current trend can be viewed as a price correction, not a crash.
“A fall in prices in Sydney of 10 per cent from peak to trough would take them back to their September 2016 level. And a fall of around 7.5 per cent in Melbourne from peak to trough would take prices back to their December 2016 level,” Aird said.
“We don’t see prices softening much in the other jurisdictions as they simply didn’t experience the same growth in prices in the prior five-year period.”
What’s more, the coming months could signal an opportune time for sellers in some areas as the market heats up over spring and summer. Pockets of the Sydney housing market and Melbourne housing market are still booming thanks to demand for limited properties in desirable areas.
Sydney suburb Northbridge, for example, was a top performer, recording 18.6% median house price growth according to CoreLogic. Apartment values in other suburbs such as Avalon on the northern beaches and Ultimo in the inner city grew by more than 16%.
In Melbourne and Victoria, coastal suburbs Brighton and Mornington saw more than 15% growth in house prices over the quarter to June, while Carlton and Abbotsford saw unit prices increase by 35.4% and 25.10%, respectively.
While the price correction continues across Sydney, Melbourne, and other capital cities, opportunity abounds for those looking to sell in key growth areas.