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Property prices beginning to fa...

Property prices beginning to fall across Australia

Property prices are beginning to fall throughout Australia, leading many to speculate that the house-buying boom the nation has been enjoying recently could be coming to an end.

However, at the same time, clearance rates at property auctions have increased slightly, suggesting that investors are taking advantage of lower prices to add to their portfolios.

Statistics published by CoreLogic reveal that house prices fell by an average of 0.5 per cent across Australia throughout the week ending on Sunday May 14th, with a slightly larger average decline of 0.7 per cent recorded in Melbourne and a drop of 0.6 per cent seen in Perth.

Over the course of the last month, property prices throughout the country have fallen by 0.9 per cent on average, with this rising to 1.2 per cent when looking at Sydney on its own, while drops of one per cent were seen in Melbourne, Adelaide and Perth.

Significant falls in property prices have also been recorded in several of Australia's major cities over the past 12 months, with average decreases of 12 per cent and 12.9 per cent seen in Sydney and Melbourne respectively.

Commenting on the figures, Henry St John, an economist with JPMorgan, stated: "Taken with the context of last month's report, today's housing finance data provides a fairly strong signal that property market activity is beginning to slow."

Yet auction clearance rates have risen slightly in recent weeks, with more than three-quarters (76.2 per cent) of properties up for auction across Australia successfully sold off last week, up from 73 per cent in the previous seven-day period.

Sydney led the way for this metric, with a clearance rate of 79.4 per cent, closely followed by Melbourne (76.8 per cent), Canberra (75.8 per cent) and Adelaide (71.8 per cent).

The CoreLogic report explained: "At face value, auction markets are continuing to indicate strength in selling conditions across Sydney and Melbourne. However, it's harder to know whether vendors are adjusting their reserve pricing in order to clear their property."

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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