Clock is now ticking for the Sydney market

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There may be no need for macro-prudential tools after more data has signalled that the housing market is softening, according to a property market economist.  

The national median house price increased by 1.2% over the quarter, which translates to a 9.4% increase over the year to September, according to the Domain Group data from APM PriceFinder.

Dr Andrew Wilson, senior economist at the Domain Group, says it is the lowest growth the market has seen for some time.

“The national house price result is the lowest quarterly growth rate recorded since March last year and continues to be primarily reliant on the strength of the Sydney market.”

Sydney, Melbourne and Darwin were the only capital cities to record an increase in house prices over the September quarter.
“Although house prices in Sydney are not accelerating at the exceptional levels recorded last year, the growth rate has been consistent over 2014,” Wilson said.

“The Sydney market will continue to lead the pack, however, the clock is now ticking for that market as further signs of moderation are emerging.”

After periods of consistent prices growth, Brisbane, Adelaide and Hobart recorded a fall in the median house price over the September quarter.
“Surprisingly, the Brisbane house price stalled over the September quarter with the median down by 1.3% which is the first negative quarterly result for more than two years.
“Adelaide and Hobart also reversed recent trends of house price growth, recording their first falls in a year.”

Over the September quarter, Perth and Canberra saw negative growth in the median house price, recording -1.5% and -1.7% respectively. Meanwhile in Darwin, prices rose sharply by 2.9%.

“Subdued prices growth in Perth was no real surprise as that market has consistently reported waning buyer activity over the past year,” Wilson said.  

“Volatility in Canberra and Darwin is also a continuation of recent market trends.”

The downwards trend in house price growth may curb the need for the Reserve Bank to step in to cool the market, says Wilson.

“Without a sustained revival in economic activity, housing markets will continue to soften, ending the debate about macro-prudential tools or changes to property taxation policy designed to offset local and foreign investor activity.”


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