Australian property prices decline by 2.4% in Q4

Australian capital city dwelling prices declined by 2.4% on a weighted-average basis in the December quarter of 2018 according to the ABS' Residential Property Index released this morning. Prices declined by 5.1% compared to Q4 from a year earlier, corresponding with the peak in the headline index.

The detail across the capital cities in Q4 was;

• Sydney -3.7% (-7.8% in year-on-year terms)
• Melbourne -2.4% (-6.4%)
• Brisbane -1.1% (-0.3%)
• Adelaide +0.1% (+1.5%)
• Perth -1.0% (-2.5%)
• Hobart +0.7% (+9.6%)
• Darwin -0.6% (-3.5%)
• Canberra -0.2% (+1.8%)

• Weighted-average of capitals -2.4% (-5.1%) 

Looking further into the headline figures, the chart (below) summarises the price changes for each capital for houses and units. 

The ABS' index is compiled using data provided by CoreLogic, who provide monthly updates on property price changes in its closely followed Home Value Index series. Earlier this month, CoreLogic released its report for February, which showed that prices declined by 0.7% nationally — a slightly softer pace relative to the declines recorded in December and January (see here).


The chart, below, tracks the values of the ABS' indexes from a historical perspective across each of the capitals since the beginning of the series in 2003 (click to expand). According to the weighted-average index, prices have declined for 4 consecutive quarters since peaking in Q4 of 2017. 

The index for Sydney recorded its 6th-straight quarterly decline (-3.7%) after reaching its peak in Q2 2017. In Melbourne, prices fell by 2.4% in Q4 to make it 4 consecutive quarterly declines from its peak in Q4 2017.

Prices declined in Q4 in Brisbane, Perth, Darwin and Canberra but at a more moderate rate compared to the 'major 2'. Adelaide prices were broadly flat. Hobart remains the standout market where prices lifted by a further 0.7% in the quarter and by a strong 9.6% across the year.  


The chart, below, shows the index values over time for houses in each of the capitals. House price declines over the past year in Sydney (-8.4%) and Melbourne (-7.6%) comfortably outpace the national decline (-5.5%).   

Lastly, this next chart shows the index values for capital city units. Sydney prices fell by 6.4% over the year, but only by a moderate 2.0% in Melbourne. The national decline was 4.2% for the year. In complete contrast, prices in Hobart continue to rise recording a sharp 11.3% increase over the past 12 months.  

  

The ABS also reported its estimate for the value of the nation's dwelling stock at $6.68tn as of Q4. That estimate is 2% lower than in Q3 and down by 3.9% in year-on-year terms.