This article is from: srnnews.com
SYDNEY, Aug 3 (Reuters) – Australian home prices suffered a second month of steep falls in July as higher borrowing costs and unease over tax changes accelerated a downturn in the market that has grabbed the attention of the country’s central bank.
Figures from property consultant Cotality showed national home prices fell 0.7% in July from June, the largest monthly drop since December 2022. Annual growth slowed sharply to 5.3%, well below the double-digit pace enjoyed early in the year.
Sydney and Melbourne again led the monthly decline with falls of 1.4% and 1.2% respectively, leaving both more than 5% lower than their recent peaks. The slowdown spread to mid-sized cities, with Perth’s once-booming market all but flat in July.
Gerard Burg, Cotality’s head of research, noted reported prices for the previous two months had also been revised lower, reflecting the speed of the downturn underway.
“These revisions highlight the rapid evolution in the market, particularly across the mid-sized capitals,” he said.
“We have observed a deterioration in the flow of new listings across the country in recent weeks, led by Sydney, as potential vendors assess a weak market and choose to wait until conditions improve.”
The marked weakening was mentioned repeatedly by Reserve Bank of Australia Governor Michele Bullock in an appearance this week, stoking speculation the central bank is done raising interest rates after three hikes this year.
A sustained fall in housing turnover would have wide implications for the economy given the housing sector’s extensive links to industries ranging from real estate services to tradespeople and construction.
Separate data from PropTrack showed its measure of home prices fell 0.3% in July, the fourth straight month of losses, with Sydney down 0.6%.
PropTrack said proposed curbs to tax benefits on investment properties were likely impacting buyer confidence, while ongoing price falls could be leading buyers to wait until values stabilise.
(Reporting by Wayne Cole; Editing by Jamie Freed)
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