Down, Down, Prices are Down . .

Figures released today from the ABS show house prices in Australia has fallen a larger than expected 1.68 percent in the March quarter, recording the biggest fall since the global financial crisis. Economists had only expected a 0.5 percent fall.

Both Melbourne and Brisbane lead the change in fortune recording a -2.5 percent change. Sydney fell 1.8 percent, followed by Adelaide & Darwin both recording 1 percent falls each. Canberra lost 0.4 percent, while Hobart recorded gains of 0.4 percent and Perth 0.5 percent.

The ABS figures follow a release from RP Data-Rismark on Friday showing capital city house prices fell 2.1 percent across the nation, the biggest fall in 12 years according to their index.

The fall in house prices is not surprising given the fall in mortgage approvals which normally leads the market by about 6 months, and the winding back of government grants used to prop up the unsustainable market the last time it started to dive. Figures from the Reserve Bank of Australia show growth in housing credit is now trickling along at the slowest pace since the start of the RBA records in 1976, some 35 years ago.

» 6416.0 – House Price Indexes: Eight Capital Cities, Mar 2011 – The Australian Bureau of Statistics, 2nd May 2011.
» RP Data-Rismark Hedonic Home Value Index, March Results – RP Data, 30th April 2011.
» Housing loan increase weakest in a generation – The Sydney Morning Herald, 29th April 2011.


  1. Still along way to go. You still need over half a million ponzi dollars for a dogbox on a main road.

  2. AverageBloke,

    Agreed but the negative mood is setting in. Now the media/investors are starting to talk about things going down it will be a matter of time for it slides even more. This is just the start more to come.

  3. Just like a TRAIN, it starts off slow but once it gains MOMENTUM, IT IS SOOOOOOOOOOO HARD TO STOP!!!!

  4. Wishwell thinking guys this government as the previous Howard government will never let the bubble burst. Just look at the lastest stunt that allows borrowers to access their superuannation funds early if their home is about to be claimed by the banks. What a scam

  5. Fred from my understanding you were always allowed to access your super if you are in financial hardship its not new.

  6. I think confidence has eroded and no matter what the government throws at residential real estate, it will continue to free fall. There will be many a sad ending for many as many will try to refinance their interest only loans and won’t value up, hence forced to sell.

  7. The Govt may try something new to “prop up” the market, but people now know they can’t get tricked a second time around. There still is a long way too go, but at least we’re heading in the right direction.
    The key now lies with property investors as many will continue to flock the market and try to sell their investment properties before things get worse. Once this gains momentum, then we may see decent price falls >20%.
    Bring on the crash!

  8. I don’t think the access of the superanuation fund will have a overly impact to support house prices. Even now with low default rates, the prices are already on the slide. For now, only the absence of new money from FHOB is a issue for property prices.
    The impact of investors exiting the property market hasn’t been felt yet. 1/3 of Aus property is owned outright and 1/3 are renting. none of them will require access to super to support. Would be anyway a bad decission to pour money into something loosing value. All signs are pointing down.

  9. Fred, that scam is robbery. Superannuation is real wealth and that’s going into mortgage payments (black holes for some). That is scary, real scary. How long can that go for when many superfunds (can’t remember the stats) have less than $100K. It will continue the ride, how many fingers do we have left to plug a hole everytime water sprouts out the dam (or damn! might be a better word).

    Other countries especially Japan never let the bubble burst either, the threshold comes when its’ no longer the Government’s decision, or maybe it is when they might think “we can’t do anything, let it fall”.

  10. We are toast. oil/insurance/interest/food/costs of living slaughterhouse. Nothing will stop this, once housing goes so will the Aust bond market and AUD = massive stagflation

  11. Fred, I think you overestimate the omnipotence of the Australian government. Would the US and UK governments have let their bubbles burst if it had been within their power to stop it? I seem to remember they tried very hard.
    Given the size of the bubble here, Australia could easily go the same way as Ireland if the government tried to step in.

  12. My understanding of the Superanuation support is that it can pay mortgage interest for a period of 3 months only. Unless this has changed it is unlikely to have much impact on the property market.

  13. This beast will take years before the masses acknowledge their plight. Sit back and enjoy the show.
    Notice the RBA left it status quo today. To cut and pump the housing and retail bubble or raise rates to fight USA currency debasement with resulting global food and energy inflation . They are as toast as a 100% low doc interest only borrower in 2010.
    The game is up for the spruikers and experts, “off with their heads” will be the cry from the mortgage belts of capital cities.

  14. Can’t wait until Australia is festooned with properties going for less than $100K in good areas. Give it 3 years.

  15. When the money supply/credit contracts futher, likely after another couple rate increases, then we will see a greater momentum in price decreases. Banks will recognize that they potentially have a big problem with the loans on their books. They will start to de-leverage. The top end always goes first, as is happening.

    visit and search property bubbles for great articles on this topic.

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