Sydney house prices fall for first time,
Sydney houses, like those in Melbourne, have experienced a decline in value due to slowing population growth and increased property listings.
This change has finally halted the relentless rise in property prices that characterized previous years.
Recent retail trade figures indicated that consumers did not utilize the stage 3 tax cuts to embark on a spending spree.
Such spending could have contributed to further inflationary pressures in the economy.
Data from CoreLogic revealed that Sydney house values dropped by 0.1 percent in October.
Notably, this marked the first monthly decline in Sydney house values since early 2023.
However, despite this decrease, the median value of a Sydney home remains extraordinarily high at $1.48 million.
This figure represents a 3.9 percent increase over the past year, making homeownership unattainable for many.
In Melbourne, house values fell another 0.2 percent last month, indicating a continuing downward trend.
Over the last three months, values in Melbourne have decreased by 1 percent and by 1.8 percent since October 2023.
Consequently, the median value in Melbourne has dipped to $928,808.
Furthermore, house values also declined in Darwin by 1.1 percent and in Canberra by 0.7 percent.
Conversely, property prices in Perth surged by 4 percent last month, showcasing a remarkable annual increase of 22.4 percent.
Additionally, Adelaide saw house values rise by 3.6 percent, leading to a 14.5 percent increase since October last year.
Brisbane values improved by 0.7 percent, contributing to an annual increase of 11.9 percent.
CoreLogic’s research director, Tim Lawless, noted that prices are stabilizing for first home buyers and investors.
This stabilization contrasts with the decline observed in the market for more expensive properties.
He pointed out that the recent slowdown in values coincides with a surge in the number of homes available for sale.
In both Sydney and Melbourne, the number of listed properties is currently 13 percent above long-term averages.
Meanwhile, in Perth, listings have increased by 20.6 percent, albeit starting from a low base.
Despite rising listings in mid-sized capitals, Perth, Adelaide, and Brisbane have stock levels more than 20 percent below the five-year average.
This trend highlights the varying dynamics in different housing markets across Australia.
“These markets still strongly favor sellers; however, the balance is beginning to improve gradually over time.”
Meanwhile, the rental market is showing indications of easing, which is noteworthy for potential renters.
Specifically, rents in Sydney have decreased by 0.6 percent recently, reflecting a broader trend.
Similarly, Melbourne experienced a decline of 0.4 percent in rental prices over the past three months.
In Brisbane, rents fell by 0.3 percent, indicating a slight shift in the rental landscape.
Hobart also saw a drop in rental prices, with a decrease of 0.6 percent during the same period.
Furthermore, Canberra experienced a more significant decline, with rents falling by 1.5 percent recently.
These reductions in rental prices across multiple cities suggest a broader trend of easing conditions in the rental market.
Receive the latest property news and advice directly in your inbox
This week’s monthly inflation report revealed that rent inflation has slowed to 6.6 percent in September, compared to 7.1 percent in June.
Tim Lawless indicated that the softer rental market is likely linked to a decrease in net overseas migration.
Additionally, an increase in the average size of households may have influenced this trend, as households shrank significantly during the COVID pandemic.
Figures released by the Australian Bureau of Statistics on Thursday suggest that new housing supply is expected to increase soon.
Specifically, approvals for private homes rose by 4.4 percent in September, reaching their highest level since August 2022.
Over the past year, approvals for houses have shown impressive growth, increasing by 16.7 percent overall.
Meanwhile, approvals for units saw a 4.7 percent increase during the month; however, they are down 12.2 percent over the past year.
These trends indicate a dynamic shift in the housing market, with varied impacts across different types of properties.
Relatively high interest rates and ongoing cost pressures continue to negatively impact the property market, causing significant challenges for many.
The introduction of stage 3 tax cuts on July 1 raised concerns that consumers might go on a spending spree.
This spending could potentially amplify inflationary pressures and delay any anticipated relief from interest rate increases.
However, the value of retail sales in September increased by only 0.1 percent, indicating a lack of consumer enthusiasm.
Since the implementation of the tax cuts, retail sales have only risen by a mere 0.8 percent overall.
Spending per person has now declined for nine consecutive quarters, reaching its lowest level since September 2021.
Although the value of household goods sales rose by 0.5 percent this month, this followed a 0.4 percent drop in August.
Sales through department stores decreased by 0.5 percent, while clothing and footwear sales fell by 0.1 percent.
Additionally, food sales also dropped by 0.1 percent, indicating a broader trend of declining consumer spending.
KPMG chief economist Brendan Rynne remarked that the retail sector remains in a deep per-capita recession.
He emphasized that these figures confirm consumers are carefully monitoring every dollar they spend.
“This outcome also raises concerns about a negative economic outlook for the September quarter,” he stated, highlighting potential challenges ahead.
