Home price moderate through October: PropTrack

Property price falls have begun to show signs of moderation, with falls in October easing to the lowest levels since the market peaked.

Property price falls have begun to show signs of moderation, with falls in October easing to the lowest levels since the market peaked earlier this year.

The widespread price falls across capital cities in recent months have shown signs of softening and, in some cases, recorded mild increases, according to PropTrack’s latest Home Price Index.

Prices moved 0.06 per cent lower nationally in October, the smallest fall since national home prices peaked in March.

The slowing in the downturn last month coincided with a smaller-than-expected increase in interest rates by the Reserve Bank after consecutive rises since May causing the cash rate to lift by 2.5 percentage points.

PropTrack senior economist Eleanor Creagh said rising interest rates had quickly rebalanced the housing market from last year’s extreme growth.

“The pace of price falls has slowed from the faster falls seen earlier this year when interest rates first started rising,” Ms Creagh said.

“Sellers are adapting to market conditions, while buyers are taking advantage of the less competitive conditions relative to spring last year.

“The RBA appears done with front-loading the tightening cycle, slowing the pace of its hikes. This may give prospective buyers a confidence boost.

“With further rises on the horizon, borrowing costs will increase, and maximum borrowing capacities will reduce, weighing on prices. This will be offset by tight rental markets, rebounding migration, low unemployment, and housing supply pressures.”

 

Sydney recorded a fall of 0.21 per cent last month, for a decline of 6.28 per cent from the top of the market. Melbourne held largely steady (up 0.02 per cent) in October.

Adelaide has proved resilient to the national downturn for most of the year, with a rise of 0.12 per cent in October establishing a new peak price in the market. It is the only market to still be recording double-digit annual growth, up 14.23 per cent, compared with a fall in the national capital city average of 2.08 per cent.

Home prices in Darwin achieved the strongest growth of the capital cities (up 0.21 per cent) last month, while Perth was up 0.11 per cent. Brisbane fell 0.09 per cent, Hobart was down 0.46 per cent and ACT prices declined by 0.37 per cent.