New property data out today from RPData show Australia recorded the biggest monthly fall in house prices since the RP Data-Rismark Home Value Index started.
“It’s the biggest fall in values that we’ve ever seen on a monthly basis so while we’re not pressing the alarm bells yet we will wait and see what the February results actually tell us” said RP Data Research Analyst Cameron Kusher.
Seasonally Adjusted, the national index fell 1.8 percent in the January quarter for capital city dwellings. Every mainland capital recorded falls in capital city prices exceeding 1 percent.
The plunge was lead by Canberra recording a 3.8 percent fall, Perth followed at 2.6 percent, Brisbane 2.3 percent, Melbourne 1.9 percent, Sydney 1.4 percent, Darwin 1.4 percent, Adelaide 1.3 percent. Hobart was the only capital to buck the trend, recording a 0.6 percent rise for the three months to January.
Property experts believe the fall is attributable to the floods in Queensland, although it is worth nothing that the two biggest falls were recorded in Canberra and Perth.
» ‘Worst ever’ property dive after disasters – News Limited, 28th February 2011.
» RPData National Media Release – January a quiet month for Australian housing markets – RPdata, 28th February 2011.
Finally, property prices are starting to crash!
I like how the media / property spruikers are trying to tell us that the property crash is attributed to natural disasters.
It defies logic if the worst performers are Canberra and Perth, which have not experienced any natural disasters.
Can’t wait to see the trend continue in coming months… The property speculators will go all run for the door and this will exacerbate the fall in property prices.
Make sure your superannuation does not have any exposure to the property crash!
Blaming the decline in prices on floods??? They really sound desparate now.
Oh yeah! Of course, the floods brought down prices, would that be the flood of property on the market?
If theres a crash, our dollar has a good chance of crashing also. So gold will make a great backup, Ive already got mine 🙂
Those drops need to get into the teens before a ‘crash’ can be declared.
It’s no surprise. The party’s over any everyone knows it. House prices couldn’t keep rising! Australia has a serious debt problem that needs to be addressed. But at the moment it
I agree, far too early to call. Yet. It could fall 20% and still only be what it was a year ago.
@AverageBloke -> at 3.8% in one month, Canberra will be in the Teens pretty quickly …
Wait for the next excuse, hot weather, lack of rainfall …. broken mirror.
The lies and deceptive employment figures and debt servicing multipliers (% of real income to service house loan debt) are now coming home to roost.
This is what happened in the US, hedonic indexes, seasonal adjustment, efficiency gains and the other rubbish they used (and still do) to twist the statistics of how healthy the economy really is – didn’t stop the market correction. Australia will be no different because they have been using the same ‘tools’.
I hope you are right Willy.
Prices may have started their downhill run. Is it asking prices or settlement prices? I can’t tell in my area on the NSW Sth coast. Some houses have been on the market for over 2 years. Others usually only move after a 10% drop in asking price. Volume on the market has increased substantially everywhere but there must be enough commissions around to keep the agents afloat. I reckon a big signal will be when RE agencies shut up shop. Haven’t seen that yet, but watch for a bailout of RE agents!
Julia’s lot are going to succeed in bringing prices down by taking consumer’s money off them. Cristine Milne’s comment about shared gov’t says lots about how the Greens have suckered the gov’t into a carbon tax – they have obviously threatened to bring the gov’t down if Julia doesn’t break her election promise not to bring in a carbon tax in this term. She should have called their bluff and gone to double dissolution and probably won a proper mandate but she prefers her own preening style of ‘negotiation’ where she loses but stays in power. I mention this because it shows how every interest group will have a lend of her at great expense, passed on to the consumer.
Many things have occurred which is causing the drop and they are not natural disasters
– people are becoming less willing to take on huge debts due to lessons learnt from Ireland and USA
– increasing RBA & bank mortgage rates
– increase in number of sellers
– decrease in number of buyers
– banks less willing to lend money to risky propositions
The only thing which can stop the decline is government intervention
The thing which can accelerate the decline is if the Australian economy goes bad due to (take your choice); EU sovereign debt, price of oil sky rockets, China goes off the boil etc
I wouldn’t recommend buying property to my worst enemy.
So today in the Melbourne AGE it says :
“In the year to January, nationwide building approvals were down 24.8 per cent, the Australian Bureau of Statistics said today”
“Approvals dived 15.9 per cent to 12,342 units in January, seasonally adjusted, from an upwardly revised 14,682 units in December. Economists had been expecting a drop of 3.3 per cent in the month”
http://www.theage.com.au/business/building-approvals-dive-most-in-8-years-20110303-1bfj9.html
If there is a shortage of houses, shouldn’t the building approvals be increasing to meet the unfulfilled demand? ;-P
There is a shortage of ‘affordable’ property.
Bronte, remember 20% on the way up is different to 20% on the way down… do your math.
The doomsday predictions with regard to the Australian property market are now becoming tiresome. Property purchases are directly linked to affordability and on that basis myself like many others have been having a 60k a year payrise over the past decade.
The resource sector is booming and unlike the previous busts……………its different this time.
@Bronte, where do you get your numbers?
The linked document states Melbourne and Sydney had capital gains of 3.6% & 2.5% respectively over the year to January.
I wouldn’t be surprised to see near zero capital gains by the end of February.
Yes it’s too early to call a crash, but is it without a doubt a tipping point.