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Sydney and Melbourne house prices did not grow in February: CoreLogic

By Jennifer Duke and Shane Wright

The nation’s biggest cities are in the middle of the most dramatic slowdown in the country with Sydney and Melbourne both recording no house price growth in February as mortgage rates start to rise.

Sydney’s median house price did not budge in February, remaining at $1.41 million according to CoreLogic data released on Tuesday morning. Melbourne’s median house price also remained unchanged at $998,356.

The hot property market during the pandemic may be coming to an end.

The hot property market during the pandemic may be coming to an end.Credit:

Apartment values in Sydney fell 0.3 per cent to a median of $831,793, which dragged overall dwelling values down 0.1 per cent. This was the first decline for the city in 17 months. Melbourne’s apartment prices increased by a modest 0.1 per cent to a median of $626,042.

The strongest price growth over the month was in Brisbane, where house prices jumped 1.9 per cent to $828,175.

CoreLogic research director Tim Lawless said housing market growth began winding down in April 2021 as fixed-term mortgage rates began to increase and fiscal support was ending.

“With rising global uncertainty and the potential for weaker consumer sentiment amidst tighter monetary policy settings, the downside risk for housing markets has become more pronounced in recent months,” Mr Lawless said.

Outside the capital cities property markets continue to show signs of strength. House prices in regional NSW increased 1.6 per cent in February to a median $748,663. Country Victorian house prices increased 1.3 per cent to a median $608,186.

Nationally, house prices across the regional areas are rising four times as fast as their capital city counterparts at 1.6 per cent compared to 0.4 per cent. On an annual basis the combined regional areas are up 25.9 per cent compared to 21.8 per cent in the cities.

“Regional housing markets aren’t immune from the higher cost of debt as fixed-term mortgage rates rise,” Mr Lawless said.

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RateCity’s database on home loans shows there are 11 fixed rates available under 2 per cent, of which 10 are one-year terms. In April 2021, there were about 180 fixed rate options under 2 per cent.

“These markets are also increasingly impacted by worsening affordability constraints as housing prices consistently outpace incomes. However, demographic tailwinds, low inventory levels and ongoing demand for coastal or tree change housing options are continuing to support strong upwards price pressures across regional housing markets,” he said.

“The slower growth conditions in Australian housing values goes well beyond the rising expectation of interest rate hikes later this year.”

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The Reserve Bank board will meet on Tuesday afternoon, however economists do not expect the central bank to increase official interest rates until June at the earliest. RBA governor Philip Lowe has said the bank is prepared to be patient to ensure sustained wage growth before increasing rates.

Canberra median house price increased 0.3 per cent in February to $1.03 million and Perth’s median house price jumped 0.3 per cent to $559,837.

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Original URL: https://www.smh.com.au/property/news/sydney-and-melbourne-house-prices-did-not-grow-in-february-corelogic-20220301-p5a0iu.html