Australian property prices down by 0.7% in Q2

Australian house prices fell by a further 0.7% over the June quarter on a weighted average capital city basis, with the pace of decline on a year earlier remaining at -7.4% according to the ABS's latest Residential Property Price Index data released this morning. These outcomes were slightly more upbeat than the consensus forecasts for declines of 1.0% in the quarter and 7.7% year-on-year.   

The details across the capital cities in Q2 was;

• Sydney: -0.5% qtr, -9.6% yr 
• Melbourne: -0.8% qtr, -9.3% yr  
• Brisbane: -0.7% qtr, -2.7% yr  
• Adelaide: -0.6% qtr, -0.1% yr  
• Perth: -1.4% qtr, -3.9% yr 
• Hobart: +0.5% qtr, +2.0% yr   
• Darwin: -1.8% qtr, -5.0% yr  
• Canberra: +0.2% qtr, -0.4% yr 

• Weighted-average of capitals: -0.7% qtr, -7.4% yr   

Breaking the results down further, the decline in property prices in Q2 was led by units at -0.8% compared to -0.6% for houses, though over the year houses at -7.7% have sustained a larger fall than units at -6.5%. 

The chart, below, shows the results for established houses across the capitals in Q2 and over the year. The weakness over the past year has been broad based, though most focus attends Sydney and Melbourne given they are the two largest markets. The annual pace of decline in Sydney retracted from -11.0% in Q1 to -10.1%, while in Melbourne it remained at -10.5%. 

In terms of units (apartments), prices in Sydney and Melbourne have fallen by 8.6% and 5.8% respectively over the past year, which is noticeably less than the magnitude of declines for established house prices. In contrast, unit prices in Brisbane, Perth and Darwin have experienced large falls than what has been sustained by houses. In Canberra, unit price declines have matched those for established houses at -0.5%. Hobart is the clear standout, where unit prices are up by 6.1% over the year compared to a 1.3% increase for established houses.    

The comprehensive breakdown of results is provided in the table, below. 

Incorporating these latest results, the ABS estimates that the total value of residential property in Australia sustained a 5th consecutive quarterly fall with a 0.3% reduction in Q2 to $6.61 trillion, which is 4.5% down on the level from a year earlier. 

The ABS's property price data is, of course, a highly-lagged release; a point that is particularly relevant for the June quarter as conditions in the nation's property market appeared to turn following the outcome of May's federal election, with tax policy remaining status quo. Also of note, the Reserve Bank of Australia announced consecutive interest rate cuts in June and July, while banking regulator APRA eased its guidance around loan assessment criteria. All told, the most recent data available from CoreLogic to the end of August confirmed that national property prices posted their first monthly rise since October 2017.  

Source: CoreLogic