Australia’s housing market recorded the weakest conditions since the global financial crisis according to the latest findings by CoreLogic.
The CoreLogic November hedonic home value index results confirmed that national dwelling values slipped by 0.7 per cent over the month, led by Sydney where the drop was double the national average.
CoreLogic head of research Tim Lawless said: “The downwards pressure on national dwelling values is largely confined to Sydney and Melbourne which together, comprise approximately 55 per cent of the value of Australia’s housing asset class,” he said.
National dwelling values slipped 0.7 per cent lower in November, led by larger falls in Sydney (-1.4 per cent) and Melbourne (-1.0 per cent) where the pace of decline has accelerated over the past month.
Lawless listed a few issues currently influencing the downwards trend in Sydney and Melbourne, while other regions continue to see some level of growth.
Tightening finance conditions have been noticeable across the investor segment market, where Sydney and Melbourne have recorded much higher concentrations of investment demand.
“Additionally, housing affordability constraints are more pronounced in these markets and rental yields are substantially lower, indicating an imbalance between rental values and dwelling values,” Lawless said.
“The ramp up in housing supply has been more pronounced in these markets against a backdrop of slowing demand, and Sydney and Melbourne have also been more affected by the reduction in foreign buying activity.”
As a result of less market activity, more listings have been advertised providing buyers with plenty of investment choice, allowing for greater negotiations on price.
Lawless said: “The rebalancing towards buyers over sellers in Sydney and Melbourne is clear across CoreLogic’s vendor metrics, with clearance rates tracking in the low 40 per cent range while private treaty sales are showing substantially longer selling times and larger rates of discounting than they have over recent year.”
Other highlights of the report included Hobart placed first as the best performing city (+1.7 per cent) and Darwin as the highest rental yield (5.7 per cent).