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Sydney's house price falls just kicked up another gear
After moderating in late October and early November, Australia's housing market downturn accelerated last week, coinciding with a seasonal increase in supply ahead of the Christmas and New Year period.
Prices fell by 0.5% in Sydney, an unusually large fall compared to those seen this year. Median values also fell in all other mainland state capital city markets except for Adelaide last week.
Sydney has now re-overtaken Melbourne as the market with the largest price declines this year.
Property listings have increased in all capital cities over the past year except for Darwin, hinting that supply may weigh on values in these markets should demand fail to improve.
After moderating slightly in late October and early November, Australia's housing market downturn accelerated last week, coinciding with a seasonal increase in supply ahead of the Christmas and New Year period.
According to CoreLogic, the median price in Australia's five mainland state capital cities -- Sydney, Melbourne, Brisbane, Adelaide and Perth -- fell by 0.3% last week in average weighted terms, extending the drop over the past month to 0.6%.
After watching auction clearance rates in the city slide to the lowest level in a decade in the previous week, Sydney's median home price tumbled 0.5% from seven days earlier, leaving the decline in Australia's largest and most expensive housing market over the past month at 0.8%.
For those who don't follow price movements in property markets closely, 0.5% in a week is a steep fall.
Median prices also fell by 0.2% apiece in Melbourne and Perth over the week, and by a smaller 0.1% in Brisbane. Adelaide was the only capital of those monitored to not recorded a price drop with median values holding steady from a week earlier.
Over the past month, median prices have now fallen 0.9% in Perth and by 0.6% in Melbourne, masking a small gains of 0.1% in Brisbane and flat outcome in Adelaide.
Courtesy of Sydney's unusually large weekly decline, it has now overtaken Melbourne as the capital city market where median prices have fallen the fastest this year, losing 6.6% compared to 5% in Melbourne.
Median prices have also fallen 3.6% in Perth since the beginning of the year, leaving the weighted national price down 4.7% over the same period despite modest gains of 0.4% and 1% in Brisbane and Adelaide respectively.
Similar trends were also evident in price movements over the past 12 months with falls of 7.8% in Sydney, 5.2% in Melbourne and 4.1% in Perth overriding gains of 0.2% in Brisbane and 1.5% in Adelaide, leaving the weighed national average at 5.4%.
Sydney and Melbourne contain around 40% of all Australian homes and account for around 60% of Australia's total housing wealth, meaning price movements in these cities are influential on nationwide price measures.
While one week does not make a trend, the acceleration in Sydney's housing downturn last week may reflect an increased willingness from vendors to sell at lower valuations given weak demand, a large amount of property listings in the city, and urgency to transact before a seasonal lull over summer.
CoreLogic said there were 31,859 homes listed for sale in Sydney last week, up 17.4% from the same corresponding week a year earlier.
Contributing to the weakness in Melbourne's property market, listings in the city have grown even faster than in Sydney over the past 12 months, lifting by 19.3% to 38,730.
It will be interesting to see whether prices in Melbourne will also pick up a little in the weeks ahead.
Across the smaller capitals, listings have also increased all locations except for Darwin over the past year, leaving nationwide capital city listings up 11.6% at 129,711.
The increase in total listings reflects that it's now taking considerably longer for the average property to sell with new listings -- defined as those that have not been put up for same within the past six months -- falling 2.8% over the year to 31,179.
The national decline in new listings reflects a pullback in people selling their homes in Sydney and Melbourne which have fallen 9.3% and 5.6% respectively over the past year, completely offsetting an increase in new listings in all other capital city markets over the same period.
The decline in new listings in Sydney and Melbourne suggests weaker housing market conditions are discouraging people from selling their property. The lift in other markets also suggests that downside pressures, if not already apparent, may also be seen in the period ahead.
