SYDNEY, June 1 (Reuters) – Australian home prices broke a 20-month profitable streak in May as falls accelerated in Sydney and Melbourne amid rising rates of interest and a cost-of-living crunch.
Figures from property marketing consultant CoreLogic out on Wednesday confirmed prices nationally slipped 0.1% in May, dragged down by a 0.3% drop within the main capital cities. While annual progress slowed, it was nonetheless strong at 14.1% reflecting the massive beneficial properties loved over 2021.
Values in Sydney dropped a steep 1.0% in May, whereas Melbourne fell 0.7%. Sydney prices are down 1.5% from their January peak however nonetheless up 23% on pre-pandemic ranges.
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Most different cities fared higher with Brisbane rising 0.8% in May, Adelaide 1.8% and Perth 0.6%.
The areas continued to profit from a shift to nation dwelling and better house, and prices rose 0.5% in May to be 22.1% greater than a yr in the past.
Weakness within the extremely priced Sydney and Melbourne markets partially mirrored the Reserve Bank of Australia’s (RBA) transfer to boost rates of interest in early May, the primary hike in 11 years.
“Housing has been getting more unaffordable, households have become increasingly sensitive to higher interest rates as debt levels increased, savings have reduced and lending conditions have tightened,” mentioned CoreLogic’s analysis director, Tim Lawless.
“Now we are also seeing high inflation and a higher cost of debt flowing through to less housing demand.”
Supply was turning patrons’ means with listings rising to above common ranges in Sydney and Melbourne, whereas clearance charges at auctions have steadily declined.
Demand had additionally come off the boil with home gross sales in Sydney down 33% within the three months to May from the identical interval a yr earlier, whereas Melbourne was off 21%.
A sustained drop in prices can be a drag on shopper wealth given the notional worth of Australia’s 10.8 million houses is put at A$9.9 trillion ($7.11 trillion).
($1 = 1.3924 Australian {dollars})
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Reporting by Wayne Cole; Editing by Sam Holmes
Our Standards: The Thomson Reuters Trust Principles.
Australia home prices fall as Sydney, Melbourne lurch lower & More Latest News Update
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