Fears about Australia’s housing bubble are likely to subside amid signs that the rampant property price growth is easing across the country’s major cities.
According to the latest CoreLogic RP Data Hedonic Australian Home Value index, the combined house prices fell by 0.3% in November as the rate of growth continues to slow across the board.
Values rose slightly in Sydney (+1.0%), Perth
(+0.9%), Brisbane (+0.4%), and Hobart (+0.2%).
However, values fell in Melbourne (-2.6%), followed by Darwin
(-0.8%), Canberra (-0.5%), and Adelaide
RP Data research analyst Cameron Kusher said the slowdown in capital growth was highlighted when annual growth rates were taken into account.
“Although combined capital city home values increased by 8.5% over the year to November 2014, the annual growth rate is now at its lowest level in the year.”
Apart from Hobart, the annual rate of capital growth in each capital city is now lower than its recent peak – which suggests most cities have moved past their cyclical peak.
Kusher said that, importantly, this was apparent in Sydney and Melbourne, which have been the main drivers of value growth over the past year.
In Sydney annual value growth peaked at 16.7% in April 2014, while in Melbourne it peaked at 11.9% in January 2014.
However, this easing of house prices indicates the market is correcting itself.
CommSec chief economist Craig James said there was more supply coming on to the market and softer demand for homes in response to the higher prices.
“There is no bubble – demand ran ahead of supply in some capital cities, like Sydney, but markets are balancing.”
This situation means there is no need for the Reserve Bank to go ahead with macro prudential controls on property investors, James added.
Combined with negligible inflationary pressures and a lift in manufacturing conditions, it should also ensure that interest rates remain stable until well into 2015.
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now
Top Suburbs :
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out