More signs of ongoing weakness in the property market have appeared, with official price indices statistics showing Australian residential properties have dropped in value by 1.7% over the March quarter.
The result comes alongside auction statistics from last weekend, which show a less-than-stellar result as the number of properties on the market continues to exceed those looking to buy, experts warn.
“There is no question that looking at the Sydney and Melbourne auction markets, this is an example of where the market is at right now,” Australian Institute of Real Estate president David Airey says, adding that vendors need to be “very careful” about their pricing.
The ABS figures show national house prices fell by 1.7% over the March quarter, and by 0.2% over the year to March.
Melbourne and Brisbane recorded the largest quarterly falls at 2.5%, followed by Sydney at 1.8%, along with Adelaide and Darwin by 1%. Canberra also recorded a 0.4% fall.
Perth and Hobart were the only cities to recorded quarterly increases, up by 0.5% and 0.4% respectively.
The yearly figures also reveal a struggling market. The largest decreases were recorded by Brisbane, down by 3.6%, and by Perth, which is down by 3.2%.
While they were the only declines over the year, the other results show little growth at all. Canberra and Melbourne prices grew the most at 1.1%, followed by Sydney at 0.8%, Adelaide at 0.9%, Hobart at 0.6% and Darwin by 0.5%.
Airey says the Perth market has been the slowest of the markets across the year, and says this situation is likely to continue.
“I’ve been saying for some time that the Perth market has been the slowest. But what we have to appreciate is that it’s the sales volume, rather than prices, that have changed.”
Airey says while most residential property owners haven’t seen their prices fall by too much, what’s changing is the actual number of properties available at the higher end of the market.
“Certainly there have been some forced sales of more expensive properties, at or around the medium end of the market. The more you rise above that, the smaller the pool of buyers compared to the number of properties.”
Meanwhile, auction results figures from the weekend show the property market continues to suffer. In Melbourne, the nation’s hottest auctions market, the Real Estate Institute of Victoria claims only a 57% clearance rate was recorded.
“The number [of] homes on the market has reduced since Easter and it is apparent from this weekend’s result that the number of active buyers has as well,” chief executive Enzo Raimondo said in a statement.
At this time last year, 872 auctions were recorded with a clearance rate of 80%, although Raimondo says next week should see 600 properties put up for sale.
In Sydney, the city recorded a 53.9% clearance rate with 361 properties on the market, while Adelaide recorded an 18.8% clearance rate. Brisbane recorded a 23.8% clearance rate with 33 properties on the market.
Airey says some of the reduction in properties can be explained by the late Easter holiday, arguing that April was “an unusual month”.
“The week following Easter there have been very few options, so I don’t read too much into those results given the low number of properties on the market.”
However, Airey does say that “these results are the sort of example that show where the market is at right now”, and warns vendors they need to be careful.
“At the moment, I can’t see any reason for change. Vendors need to be very careful about their pricing, and buyers have an opportunity to look at more stock before they buy property.”
“Well-located, valuable property will always sell. That’s the bottom line.”