House price growth is slowing down

House price growth is slowing down
The brakes are on the big gains in Australia’s housing market after peaking in November 2016.

The latest figures from CoreLogic’s Home Value Index were flat right across the country in October. That follows the 0.2 per cent increase in September.

The data shows price growth over the quarter slowing to 0.3 per cent taking the annual rate down from 8 per cent to 6.6 per cent.

Sydney led the way down with home prices there down by 0.5 per cent.

“Seeing Sydney listed alongside Perth and Darwin, where dwelling values have been falling since 2014, is a significant turn of events,” CoreLogic head of research Tim Lawless said.

However, he pointed out that Sydney dwelling values are up 74 per cent since the growth cycle commenced in early 2012.

Mr Lawless said the slowdown was the result of tighter credit policies changing the landscape for borrowers.

“Lenders have tightened their servicing tests and reduced their appetite for riskier loans, including those on higher loan to valuation ratios or higher loan to income multiples,” Mr Lawless said.

“Additionally, interest only borrowers and investors are facing premiums on their mortgage rates which are likely to act as a disincentive, especially for investors who are generally facing low rental yields on investment properties.”

UBS said Australia’s housing boom party is over.

“There is now a persistent and sharp slowdown unfolding,” UBS economists said in a report.

“This suggests a tightening of financial conditions is unfolding, which we expect to weigh on consumption growth via a fading household-wealth effect.”


Business First is a peer-to-peer magazine: written by CEOs and other high level executives, with interviews with some of the country’s best leaders.

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