Property prices fall in November with Sydney & Melbourne softening

01 Dec Property prices fall in November with Sydney & Melbourne softening

It’s been heralded for some time now, the end of the property boom (some even say bubble). The media outlets will no doubt love Novembers results, but we maintain that property prices are softening, rather than sliding their way to significant year on year losses. Just last month the buzz tagline was ‘Melbourne overtakes Sydney as the fastest growing market.’ Sadly, November was not kind to Melbourne.

After tracking slightly higher than flat for October, Melbourne has posted a monthly loss of -3.5% with Sydney following on -1.4%. A poor result for Hobart (at -2.4%) helped drag the combined capitals down to -1.5%. The breakdown can be seen below.

November 15 data

Keeping things in perspective, Melbourne & Sydney are still in double digits of growth year on year and the percentage for the combined capitals is not far behind on 8.7%. However, as many commentators have pointed out, Melbourne & Sydney are large markets, but the rest of the country is a mixed bag. 

We believe that the apartment supply in Melbourne will stop it from overtaking Sydney, and while we may have some further soft results, we’re still predicting modest growth for the coming year.

The only capital cities where values have declined over the past year are Darwin (-4.2 per cent) and Perth (-4.1 per cent), where weaker economic conditions and a slowdown in population growth contributed to an early peak in housing market conditions in December last year.  The equivalent peak in the cycle for Darwin was May 2014.   Since that time, Perth values are down a cumulative 5.9 per cent and Darwin values have fallen by a larger 6.8 per cent.

RPData stated that “as a consequence of the tighter lending environment for investors, as well as gross rental yields being at near record lows, participation in the housing market from investors has reduced from 54.1 per cent of all new mortgages in May 2015 to 45.4 per cent at the end of September, which is the lowest level since July 2013.   Data released by APRA at the end of last month showed the pace of investment related housing credit growth fell below the APRA 10 per cent speed limit for the first time since September last year, with the monthly change in investment credit growth the lowest since October 2011.”

Steve Day
steve@steveday.com.au

Steve Day offers over 20 years of experience in the real estate, property and building industries. Already an award winning agent with some of the large franchise groups, Steve specialises in properties located in Cronulla, Burraneer, Lilli Pilli and the surrounding suburbs. A naturally gifted communicator and negotiator, Steve is committed to his clients’ success and relishes the opportunity to be a part of a sales campaign from start to finish. Throughout his career he has achieved an outstanding track record having held the position of top selling principle in Sydney's South and ranking in the top 10 throughout NSW. Known in the industry as a sales, auctioneer and marketing specialist, his impeccable reputation and extensive experience has secured the position as the leading force behind hundreds of successful auction and marketing sales campaigns. His ability to coach and mentor has allowed him to consistently exceed both his clients and fellow co-workers expectations by creating exceptional property outcomes through his determination and competitive spirit. Friendly and approachable at all times, Steve brings expertise, energy and enthusiasm to each property he represents.

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