Brisbane joins Sydney, Melbourne house price falls in June: PropTrack

Cautious buyers waiting for economic certainty has caused property prices to fall down the east coast, according to property researcher PropTrack.

Auctioneer Rob Trovado calling an auction in Sydney’s Greystaynes last month. Picture: David Swift

Property prices are now falling along the east coast as consecutive hikes in interest rates weigh on buyer's decisions to move home.

Brisbane reported its first fall in house prices since April 2020, making it the latest capital city to succumb to the end the housing boom with a decline of 0.09 per cent through June, according to property researcher PropTrack’s latest Home Price Index.

On a national level, property prices last month fell 0.25 per cent, now down 1 per cent since the peak of the market.

The change has been led by declines in the country’s three most expensive cities: Sydney (down 0.40 per cent), Canberra and Melbourne (down 0.61 per cent).

PropTrack economist Paul Ryan said he was surprised to see Brisbane trend downwards so soon in the downturn cycle given it’s recent strength and relative affordability to the southern markets.

“It signals that buyer sentiment has dropped quite significantly, even in just the last month,” he said.

“It’s fair to say that the higher than expected rate rise from the RBA earlier in the month played a big part.

“That’s increased a lot of people’s, including our own, expectations of how high interest rates will be at the end of the year. So, you can understand why buyers are a little a little more reticent to bid as highly as they have over recent months.”

Graphic: The Australian

Adelaide is quickly becoming the standout market as the two-speed market continues. The South Australian capital recorded 0.42 per cent growth through June, while Hobart (up 0.26 per cent) and Perth (up 0.12 per cent) were up in June, all of which are cities sitting at a new price peak.

Prices in Darwin were also up 0.08 per cent, but have moved past the top of its cycle.

Declines in the country’s two largest markets did accelerate through June, which Mr Ryan said could be influenced by the seasonal trends in the market given free pro parties are sold through the colder winter months.

“The speed of falls has increased a little bit and it’s more that buyer sentiment now in Sydney and Melbourne after two or three months of falls is going down and that, to some extent, has a self-fulfilling prophecy about it,” Mr Ryan said.

Regional areas have continued to outperform the capitals, with prices up 50 per cent since the start of the pandemic and are now sitting at a price peak. Some regional markets declined in June, including regional NSW (down 0.02 per cent), regional Victoria (down 0.13 per cent) and regional Western Australia (down 0.80 per cent).

The recent slowdown in house prices has proved to the sharpest in more than 30 years. PropTrack is likely to revise its expectations for both prices and interest rates given economic uncertainty is likely to extend beyond 2022.

The Reserve Bank is set to meet on Tuesday to decide whether another rate rise is needed to counter strong inflation.