Average home prices in NSW and Victoria fell by over $55,000 last year
Australian capital city home prices fell at the fastest pace since at least 2003 in the December quarter last year, according to new data from the ABS.
Sydney and Melbourne led the national price falls with declines of 3.7% and 2.4% reported respectively.
In dollar terms, the average capital city home price fell by $15,700 during the December quarter, and by $38,600 over the year.
Australia's total housing market is now valued at $6.7 trillion.
Australian capital city home prices fell at the fastest pace on record in the December quarter last year, according to the latest Residential Property Price Index released by the Australian Bureau of Statistics.
Over the quarter, prices fell by 2.4% across the capitals, the largest percentage decline since the updated series began in late 2003.
Combined with declines over the prior three quarters, that left prices down 5.1% from a year earlier, it is also the largest decline in the 15-year history of the ABS series.
In dollar terms, the average capital city home price fell by $15,700 during the December quarter, and by $38,600 over the year.
In New South Wales and Victoria -- Australia's most populous states -- the average home price fell by $74,900 and $56,000 over the year.
Image: BI
As a whole, the total value of Australia's 10.3 million homes fell by $133.1 billion to $6.7 trillion during the December quarter. That left the national figure down $268 billion from the end of 2017.
Bruce Hockman, Chief Economist at the ABS, said the national weakness was highly influenced by declines in Sydney and Melbourne, Australia's largest and most expensive housing markets.
"Australia’s two largest cities continue to lead the fall in property prices," he said. "These falls follow a period of solid growth, where prices in Sydney rose 68% and Melbourne rose 54% over the five years to the December quarter of 2017."
So the comparatively steep fall in prices in recent quarters followed an even larger boom in prices in the prior market upswing, something that was largely fuelled by lower mortgage rates, according to a paper released by researchers at the RBA earlier this month.
However, while average mortgage rates continue to sit near multi-decade lows, Hockman said recent price declines have been largely caused by tighter lending standards, especially in Sydney and Melbourne.
"While property prices are falling in most capital cities, a tightening in credit supply and reduced demand from investors and owner occupiers have had a more pronounced effect on the larger property markets of Sydney and Melbourne," he said.
This table from the ABS shows that home prices fell in all capital cities except for Hobart and Adelaide in the December quarter. The column marked HPI is the change in house prices, while that labelled ADPI is for attached homes such as units.
Image: ABS