This article is from the Australian Property Journal archive
RESIDENTIAL property prices slipped almost 8% in 2008 with Canberra, Sydney and Perth recording the biggest falls, according to the Australian Property Monitors.
APM’s senior economist Liam O’Hara said the December 2008 quarter housing and unit figures leave little doubt that the Australian residential property market is in trouble.
“Some capital cities have witnessed the largest price falls in years. This is the second consecutive quarter where values have either fallen or remained very sluggish.
“On the east coast, Sydney saw a 4.2% fall in median house prices and a 3.8% fall in the unit/apartment market, through the year,”
Sydney house and unit prices fell 0.7% and were flat to $536,021 and $362,366 respectively.
The national capital also recorded sizable declines through the year, with the median price of a typical Canberra home selling for $30,000 less than in December 2007. House prices fell 3.8% and unit values dropped 1.8% in the quarter and house and unit prices decreased 6.7% and 2.6% respectively.
“On the west coast, Perth recorded a 7.9% fall in median house prices in the year to December, while to the south, Hobart unit values fell 7.1%,” he continued.
Other capital cities reported mix results, Brisbane house prices rose 3.3% to $432,031 whilst unit prices fell by 3.5% to $318,236. In the 12 months to December, house prices rose 0.4% and unit prices dropped a substantial 6.5%.
Melbourne house prices rose by 0.9% to $447,161 and unit prices fell 0.1% to $333,437. Over the year, house prices rose by a modest 0.9% and unit values declined 1.5%.
Meanwhile Adelaide house prices remained flat while unit values increased 2.1% in the quarter and also increased over the year, by 2.9% to $412,290 and 2.7% to $267,737 respectively.
And Hobart house prices stayed steady at $285,831 whilst unit values dropped 4.4% to $267,737. Over the year, house and unit prices fell 0.4% and 7.1% respectively.
Darwin was the only city to buck the trend, house and unit values rose by 0.6% to $480,360 and 4.9% to $355,596 in the quarter. Over the 12 months, house and unit prices jumped 5.5% and 20.5% respectively.
O’Hara said while the first home buyers’ share of the mortgage market increased in November 2008, these latest figures show that the Government’s first home buyers boost scheme has done little, thus far, to stem falling property prices.
“Australian property prices are unlikely to fall precipitously in 2009, as witnessed in the United States and the United Kingdom throughout 2008,” he predicts.
O’Hara said Australian property market values will continue to slide modestly over the next two quarters.
“There is now a genuine belief, among even the most optimistic economists, that the current fiscal and monetary policy stimulus packages are not enough. Gross Domestic Product has come to a standstill and we have just witnessed the biggest spell of disinflation in over 10 years.
“The very thought that the economic situation may get worse should be enough to prompt another round of deep cuts to the official interbank cash rate when the Reserve Bank board meets on Tuesday, for the first time in 2009, to consider monetary policy,” he concluded.
Australian Property Journal
