Annual home price growth has braked to the slowest point in more than two-and-a-half years as conditions cool in the nation’s hotspots.
The annual pace of house price growth across Australia’s capital cities rose just 6.4 per cent in March, according to figures from CoreLogic RP Data on Friday.
That’s the weakest point in 31 months, and sharply lower than the 7.6 per cent rise recorded in February.
This time last year it was 7.4 per cent.
“The housing market has been losing momentum since July last year, when capital city dwelling values were increasing at the annual rate of 11.1 per cent,” CoreLogic RP Data head of research Tim Lawless said.
And the days of double digit house price growth are gone, with no individual city achieving that feat over the past year.
Mr Lawless noted that annual house price growth in Sydney has more than halved to 7.4 per cent, from a high of 18.4 per cent in July.
Melbourne remains the fastest growing market over the past year, with an 9.8 per cent rise in home values.
But Melbourne’s apartment sector is struggling: detached housing has gained 10.7 per cent over the past 12 months, while unit values are only 2.5 per cent higher.
Mr Lawless said nearly 20 per cent of all Melbourne apartments that resold over the last three months of 2015 did so at a price lower than what they were previously bought for.
“Such a high proportion of loss-making resales is a likely indicator of negative equity developing in this precinct as a result of supply outstripping demand,” he said.
Capital city housing values rose just 0.2 per cent in March, from 0.5 per cent in February, the report shows.
And property prices rose 1.6 per cent over the first three months of 2016, almost half the growth for the same period in 2015.
But with a record number of homes being built, home price growth was naturally expected to soften to a more sustainable pace, CommSec chief economist Craig James said.
He said there’ll be more to come, which will be a relief for policymakers.
“Overall, there isn’t anything remarkable in current home price trends,” he said.
“The Reserve Bank can safely remain on the interest rate sidelines.”
MEDIAN HOME PRICES AND CHANGES
* Sydney: $730,000, month +1.0 pct, year +7.4 pct
* Melbourne: $560,000, month -0.6 pct, year +9.8 pct
* Brisbane: $470,000, month -1.2 pct, year +4.5 pct
* Adelaide: $415,000, month +0.5 pct, year +3.2 pct
* Perth: $495,000, month +1.2 pct, year -2.0 pct
* Hobart: $341,500, month -1.1 pct, year +4.8 pct
* Darwin: $505,000, month +2.1 pct, year -1.8 pct
* Canberra: $540,000, month -0.8, year +1.7 pct
* Combined capitals: $550,000, month +0.2, year +6.4 pct
* Rest of state: $365,000, month -0.2, year +1.6 pct
Source: CoreLogic RP data