According to an article in Property Wire, property prices in Australia’s state capitals have now fallen for six straight months, and there are worries that interest rate rises and volatile financial markets could make the situation worse.
The latest figures from the Data-Rismark Hedonic Home Value Index show that property values decreased by 0.2% in June which is a little better than previous months, as prices fell by 0.3% in May, by 0.4% in April and 0.5% in March. In spite of these recent falls a lot of experts still feel that property in Australia is overvalued, as prices have increased substantially in recent years due to the availability of cheap credit, and economists suspect that there are at least one or two more rate rises in the pipeline as Australia’s inflation continues to trend upwards.
It’s possible that house prices will continue to drop a little further, but not all regions are seeing price falls. Although property prices have dropped by 6.3% in Brisbane and by 4.7% in Perth during the past year, it’s a different story in Sydney where prices have increased by 0.5%. However nationwide sales of new homes fell in June by 8.7%, which is the largest percentage for five years according to a survey by the Housing Institute of Australia JELD-WEN New Home Sales Report, and there are real concerns that the housing sector is becoming weaker even though rates have now been held at 4.75% since last November.
Now there is the additional worry over the turmoil in the financial markets, although some experts think this could prompt the Reserve Bank of Australia to lower interest rates which could encourage first-time buyers back into the market. However most think that Australian interest rates will remain the same for the rest of the year causing property prices to remain more or less static.
Property prices in Australia have been constrained this year by low consumer confidence, with the upper end of the market suffering the most.
Read the original article here.