Australia’s capital city house prices declined 0.2% in March after growing positively in the beginning of 2016. The easing of price growth on monthly basis is in line with the view that the nation’s housing market faces certain challenges and will continue to be weak in 2016, according to ANZ. House price growth in major capital cities was greatly weaker in spite of solid auction clearance rates in recent weeks.
Brisbane dwellings recorded the biggest drop in prices in March amongst the major Eastern seaboard capitals. Meanwhile, prices in Melbourne and Sydney also declined somewhat. Melbourne’s 18-month growth streak came to an end with March’s decline. Weaker price growth was recorded in other capital cities too, with Canberra and Hobart posting the weakest growth.
Nearly all housing market sectors have witnessed slowdown in price growth. Rural regions and capital cities both have witnessed a slowdown in price growth from the 2015 peaks although regional Western Australia recorded the sharpest falls as the downturn in the mining sector remains. Even if prices dropped throughout the nation, prices are unlikely to significantly decline further, added ANZ.
The Australian housing market has continued to be strong so far in 2016, despite current tightening in borrowing criteria. The housing market resilience is likely to remain given the strong underlying demand for housing in the country, notes ANZ. Furthermore, rebound in auction clearance rates in recent months indicates towards more stable price growth in mid-2016.
