House prices slip downwards, new report finds

Capital city unit markets had a decline over the quarter of 0.9 per cent, to a median of $555,574.

Both houses and unit prices increased over the past year, by 2.3 per cent and 0.6 per cent, respectively, which is the lowest rate of growth since 2012.

Domain data scientist Dr Nicola Powell said that there were various reasons for the slowdown, and each city is affected differently.

“Drivers such as employment growth, new housing supply, affordability hurdles, tightening credit policies and out-of-cycle rate hikes have made their impact; however, the effect on property prices varies from city to city,” Dr Powell said.

Sydney house prices had their largest quarterly decline since 2015, with a 2.6 per cent drop, and had an annual decline of 1.4 per cent, the first annual decrease since mid-2012.

“Although both house and unit values declined, units softened moderately compared to house prices in March, demonstrating the impact of the affordability hurdles of purchasing a home in the Harbour City,” Dr Powell said.

Melbourne crept up on Sydney, making the house price gap the lowest in four years, and it was the only city to record unit price growth in the quarter.

“As house prices continue to increase in Melbourne and soften in Sydney, the difference in median home values between the two capital cities is near a four-year low,” Dr Powell said.

Hobart had the strongest quarterly and annual growth of the capital cities for houses, and while unit prices decreased over the quarter, they did deliver the strongest annual performance.

“Hobart once again delivered remarkable results over the March quarter for both houses and units. While a quarterly decline brought unit prices down from the record high achieved in December, Hobart’s median unit price now sits above both Adelaide and Darwin,” Dr Powell said.

Other cities to experience growth in the quarter were Adelaide and Canberra who both experienced a 0.8 per cent growth.

Brisbane, Perth and Darwin all saw a decline in house prices with 0.6 per cent, 2.0 per cent and 7.5 per cent, respectively.

Unit prices decreased across the country, with only Melbourne experiencing growth and Adelaide remaining flat.

The largest decline was in Darwin with 15.9 per cent, followed by Hobart with 5.7 per cent and then Brisbane with 4.3 per cent.