Housing prices remained flat during April in just another sign the property market is beginning to cool off as would-be buyers back away due to rising interest rates, the new RP-Data Rismark Hedonic Home Value Index reveals.
The figures come as auction clearance rates across the country are continuing to fall, especially in Melbourne where rates have dropped from over 80% to 73% in just a few weeks.
National prices grew by a seasonally adjusted 0.2% during April and 2.4% during the quarter, although the index reveals prices are up by 11.9% from the same time last year. The national city median dwelling price is now at $460,000.
All capital cities recorded increases lower than the national average of 1% per month in the previous 12 months, RP Data said, with Melbourne’s growth rate halved from 1.6% in the year to March to just 0.8% in April.
Brisbane values fell 1.2%, Perth values were down 0.9%, while Darwin recorded a decrease of 0.3%.
For the quarter, Hobart prices grew by 6.1% to $329,000, while Melbourne wasn’t far behind with a 3.7% increase to $465,000. Sydney values grew by 3.6% to $507,000, with Darwin up 3.1% to $480,000 and Canberra up 4.1% to $511,200.
Adelaide prices grew by 1.4% to $385,000, with prices in Brisbane and Perth actually dropping 0.5% and 0.6% to $445,000 and $475,000 respectively.
The highest rental yields were recorded in Darwin with 5.4% for houses and 5.6% for units, while Melbourne was the worst performer for yields with 3.6% for houses and 4.1% for units.
RP Data research director Tim Lawless said in a statement the April results are the lowest monthly capital gain since December 2008 during the onset of the global financial crisis.
“A wide range of indicators have been hinting that a slowdown in houses and for units was on the cards. We are in a market now that has lower auction clearances, weaker home loan approvals and lower consumer confidence.”
“Combined with the six recent interest rate rises, and the fact that home values have recorded very large gains across key markets since the start of 2009, it is not surprising to see values start to track sideways,” Lawless said.
Rismark International chief executive Christopher Joye also said the firm is forecasting cooling in the market for the foreseeable future.
“The April results are important since they provide the first credible evidence of a genuine moderation in conditions consistent with the recent weakening in auction clearance rate and housing finance data. The RBA will no doubt also chalk this one up to a victory for their recent ‘jawboning’.”
The figures come after the Real Estate Institute of Victoria announced 900 auctions are expected for next weekend, despite clearance rates falling to about 73%. Lawless said this trend has been noticed across the country.
“We are seeing more properties selling than what is being added to the market each week which indicates that buyers have been outnumbering sellers.”
“RP Data has recorded more than 80,000 properties being prepared for sale over the last month suggesting that the number of new listings entering the market is likely to remain healthy over the coming month.”