HOUSE prices across Australian capital cities have dropped four per cent over the 10 months to October, according to the latest RPData research.
In its October RP Data-Rismark Home Value Index, which was measured just prior to the Reserve Bank’s decision to cut the official cash rate to 4.5 per cent.
Sydney and Canberra were the most resilient in the month of October, with homes producing flat to positive capital growth at 0 per cent and 1.6 per cent respectively.
The best performing capital city was Darwin, with home values up 2.4 per cent over the three months to October, while Brisbane experienced the weakest results with values down -2.8 per cent.
The year-to-date results highlight the divergent outcomes more clearly, RP Data’s director of research Tim Lawless said.
Over the 10 months to October, Canberra and Sydney dwelling values have not moved a great deal: up 0.9 per cent and down 1.4 per cent respectively.”
“In contrast, Brisbane home values have been hit hard and are now off -7.5 per cent while Melbourne dwellings have corrected -5.8 per cent after very strong 25-30 per cent capital growth over 2009-10.”
“The combination of lower interest rates, cheaper homes, and rising incomes is generating a welcome boost to housing affordability, particularly in those markets where value falls have been more significant,” Mr Lawless said.
Rismark’s Managing Director, Ben Skilbeck, added,: “Our October results obviously precede the RBA’s crucial November rate cut. Yet even prior to the RBA’s decision, the ABS reported that the seasonally-adjusted number of new home loans approved to people buying established dwellings had increased for seven months consecutively. New housing finance approvals are a critical proxy for housing demand.”
Mr Skilbeck predicted the RBA’s rate cut will have a flow-on effect to housing affordability and property market activity by the end of march next year.
“With fixed-rate home loans as low as 5.99 per cent now available in the market, and variable rate loans being offered at 6.39 per cent, we expect that the substantial improvement in affordability will flow into overall housing activity by the end of the first quarter next year”, Mr Skilbeck said.
Housing market remained soft prior to RBA rate cut