Property prices in Australia are falling at a faster rate than during the global financial crisis, with new figures showing plummeting prices are no longer restricted to major property markets Sydney and Melbourne, news.com.au reports.
Australia Bureau of Statistics figures, released yesterday, show house prices in Australia’s capital cities fell 2.4 per cent in the December quarter to record a total drop of 5.1 per cent in 2018.
This is even higher than the price drop of 4.6 per cent seen in 2009, during the financial crisis.
Unsurprisingly, Sydney was worst affected, suffering a huge 7.8 per cent property price fall last year, closely followed by Melbourne with a 6.4 per cent price decline for the year.
Darwin and Perth also suffered significant hits to their housing prices, with a 3.5 per cent and 2.5 per cent drop over the course of 2018 respectively.
Brisbane also saw a 0.3 per cent decline in its property prices for the year.
Elsewhere, priced actually increased 1.5 per cent and 1.8 per cent in Adelaide and Canberra, while Hobart enjoyed a huge 9.6 per cent hike during the period.
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“Australia’s two largest cities continue to lead the fall in property prices. These falls follow a period of solid growth, where prices in Sydney rose 68 per cent and Melbourne rose 54 per cent, over the five years to December quarter 2017,” ABS chief economist Bruce Hockman said.
“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.”
$133,057 million in property value wiped of the table
The total value of residential dwellings in Australia was $6.6 trillion as of the end of the 2018 December quarter, representing a $133 million drop over the quarter.
The mean price of residential dwellings fell $15,700 to $651,100 and the number of residential dwellings rose by 42,600 to 10,256,700 in the December quarter 2018.
Affordability is still an issue
The report comes as Australian Institute for Business and Economics director, Professor John Mangan points to inheritance tax as the solution for Australia’s housing affordability crisis.
Inheritance taxes, or death duties, were repealed in 1979.
“Inheritance taxes present an opportunity to capture a portion of this tax and apply it directly to address housing affordability, reducing less equitable or efficient forms of tax, and or funding expenditure – such as education – aimed at improving equality of opportunity,” Mangan said a recent report he led for the University of Queensland.
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