House prices drop in Sydney, as Melbourne prices stall

IT’S been a while, but house prices are on their way down again after big falls in Sydney and other areas.

TUMBLING house prices in Sydney and Melbourne are the main drivers behind the first annual drop in national property prices in six years, a new report shows.

The national median house price fell 1.0 per cent over the June quarter and year, according to a report by property classifieds group Domain released on Thursday.

It is the first time values have fallen on an annual basis since June 2012.

The negative national growth rate reflects weakening house prices in Sydney and Melbourne, which together represent about two thirds of Australia’s housing market by value.

Sydney house prices fell by 4.5 per cent in the 12 months to the end of June for their largest annual drop since 2008.

Sydney units also fell by 3.5 per cent over the same period.

The figures chime with those released this week by property data firm CoreLogic, which said overall Sydney prices fell 5.0 per cent in the 12 months to July 22.

“House and unit prices in Sydney are now back to values seen at the end of 2016,” Domain property analyst Nicola Powell told AAP.

Tighter credit availability and a high number of units being built are key factors behind the dive, Dr Powell said.

“With more choice and less urgency, there are fewer active buyers in the market, and those who are in the market are being restricted by tightening lending standards and the availability of credit.”

Lending standards have come under fire at the ongoing banking royal commission, leading many institutions to increase scrutiny of borrowers’ income and expenses — particularly in Sydney and Melbourne, which have high home price to income ratios.

Hobart, meanwhile, delivered the strongest annual house price growth of all capital cities at 15.9 per cent, continuing its trend of double-digit annual growth that started in early 2017.

“We’re seeing a lot of capital from Melbourne and Sydney flow into Hobart … as it offers relative affordability,” Dr Powell said.

MEDIAN HOUSE PRICE YEAR ON YEAR GROWTH AT JUNE 2018

National — down 1 per cent

Adelaide — up 3.1 per cent

Brisbane — up 2 per cent

Canberra — up 6.2 per cent

Darwin — down 11.8 per cent

Hobart — up 15.9 per cent

Melbourne — up 0.5 per cent

Perth — down 1 per cent

Sydney — down 4.5 per cent

MEDIAN UNIT PRICE YEAR ON YEAR GROWTH AT JUNE 2018

National — down 1 per cent

Adelaide — up 0.9 per cent

Brisbane — down 6.4 per cent

Canberra — down 2.1 per cent

Darwin — down 17.2 per cent

Hobart — up 22.6 per cent

Melbourne — up 0.9 per cent

Perth — up 1.7 per cent

Sydney — down 3.5 per cent

Prices in Sydney have dropped. Picture: Dean Lewins/AAP