House price declines level off

Australian house prices have declined for the third straight quarter, although the December drop was not as severe as that seen in the September quarter.

Preliminary estimates by the Australian Bureau of Statistics show the price index for the eight capital cities decreased 0.8% in the December quarter of 2008. The contributors to the decrease were Melbourne (-1.7%), Brisbane (-1.2%), Hobart (-1.0%), Perth (-0.9%), and Sydney (-0.3%), with these falls partially offset by increases in Adelaide (+0.3%), Canberra (+0.7%) and Darwin (+1.6%).

Over the year to December quarter 2008, ABS estimates indicate that the price index for the eight capital cities decreased by 3.3%. Annually, house prices rose in Darwin (+3.8%) and Adelaide (+2.0%), and fell in Perth (-6.7%), Sydney (-4.1%), Canberra (-4.1%), Melbourne (-3.2%), Hobart (-3.1%), and Brisbane (-1.4%).

Australian house prices are anticipated by economists to fall in the next two quarters due to a lack of buyer confidence. But do not expect anywhere near the falls seen in the UK and the US due to the positive impact of a plummeting interest rate and the Rudd Government’s stimulus packages.

The latest rate cut in February means that a home buyer on an average mortgage of $262,000 is now paying $873 less per month than they were in September last year, according to the Real Estate Institute of Australia.

A summary of the mild housing and unit price decline in 2008:
Sydney
• In the December quarter Sydney house prices fell 0.7% and the unit market remained flat.
• Through the year, house and unit prices fell 4.2% and 3.8% respectively.
Melbourne
• House prices rose by 0.9% while unit prices fell 0.1% in the December quarter.
• Through the year, house prices rose by a modest 0.9%, and unit values declined 1.5%.
Brisbane
• In the December quarter, Brisbane house prices rose 3.3% while unit prices fell by 3.5%.
• Through the year, house prices rose 0.4% and unit prices dropped a substantial 6.5%.
Adelaide
• Adelaide house prices remained flat while unit values increased 2.1% in the December
quarter.
• Through the year, house and unit prices rose 2.9% and 2.7%, respectively.
Perth
• House and unit prices fell 1.9% in the December quarter.
• Through the year, the picture was bleak, with house and unit prices falling 7.9% and
4.7%.
Canberra
• In the December quarter, Canberra house prices fell 3.8% and unit values dropped 1.8%.
• Through the year, house and unit prices dropped by 6.7% and 2.6% respectively.
Hobart
• In the December quarter, house prices stayed steady and unit values dropped 4.4%.
• Through the year, house and unit prices fell 0.4% and 7.1% respectively.
Darwin
• Darwin house and unit values rose by 0.6% and 4.9% in the December quarter.
• Through the year, values continue on the up, with house and unit prices rising a staggering
5.5% and 20.5% respectively.

Posted Wednesday 11th of March 2009, 6:04 PM