Not all doom and gloom as June dwelling values declined

Looking at each capital city market, Brisbane, Adelaide and Hobart were the clear winners, with the former recording a rise of 0.2 of a percentage point and the latter two by 0.3 of a percentage point.

When taking a look at a quarterly basis, things start to look better, with Hobart coming out on top with a rise in dwelling values of 2.3 per cent, and the combined regional markets recording a rise of 0.6 of a percentage point. Darwin saw the biggest fall by 1.1 per cent, followed by Perth by a decline of 0.5 of a percentage point, Melbourne down by 0.4 of a percentage point and Sydney and Canberra both down by 0.3 of a percentage point.

Declines were mostly recorded for premium property, with the top 25 per cent of values dropping by 1.5 per cent, driven mostly by Sydney and Melbourne which declined by 7.3 per cent and 2.5 per cent, respectively.

Despite the general buzz about Sydney and Melbourne, the recent declines in these two markets have resulted in what the CoreLogic report calls “the most substantial decline in housing demand”.

“Despite the slippage in home values across Sydney, and to a lesser extent Melbourne, dwelling prices remain very high relative to other capital cities,” Mr Lawless said.

“With lenders now focusing more on overall debt-to-income ratios and household living expenses, housing markets where prices are high relative to incomes could see less activity as prospective buyers find their borrowing capacity reduced.

“Additionally, with the federal election campaign imminent, we could see investor confidence impacted further if changes to taxation polices related to investment housing are debated.”

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