Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Australia home prices slip in June as Sydney, Melbourne drag

Economy Jun 30, 2022 09:25PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. New homes line a street in the Sydney suburb of Moorebank in Australia, May 26, 2017. Picture taken May 26, 2017. REUTERS/Jason Reed

By Wayne Cole

SYDNEY (Reuters) - Australian home prices slipped for a second month in June as once red-hot markets in Sydney and Melbourne felt the chill from rising interest rates and a cost-of-living crunch.

Figures from property consultant CoreLogic out on Friday showed prices nationally fell 0.6% in June from May, when they dipped 0.1%. Prices were still 11.2% higher for the year reflecting the huge gains made over 2021 and early 2022.

The weakness was concentrated in the capital cities where prices dropped 0.8% in June, while annual growth slowed to 8.7% having been above 20% early this year.

The retreat in Sydney gathered pace as values fell 1.6% in the month, while Melbourne lost 1.1%. Annual growth in Sydney is down to 6%, a long way from the heady days of 2021 when prices rose by a quarter.

Most other cities were positive though again price growth is slowing. Adelaide led with a gain of 1.3%, but Brisbane eked out a rise of just 0.1% and Perth 0.4%.

The regions continued to benefit from a shift to country living and greater space, and prices rose 0.1% in June to be 20% higher than a year ago.

The slowdown in part reflects higher borrowing costs as the Reserve Bank of Australia (RBA) lifted rates in both May and June, and is considered certain to hike again next week in an effort to contain surging inflation. [AU/INT]

"Considering inflation is likely to remain stubbornly high for some time, and interest rates are expected to rise substantially in response, it's likely the rate of decline in housing values will continue to gather steam and become more widespread," said CoreLogic's research director, Tim Lawless.

Markets are wagering the current 0.85% cash rate could reach 3.75% by the middle of next year. The major banks have also sharply raised borrowing costs on fixed-rate mortgages and tightened lending standards.

A sustained drop in prices would be a drag on consumer wealth given the notional value of Australia's 10.8 million homes had risen A$210 billion ($144.86 billion) in the first quarter alone to reach A$10.2 trillion.

($1 = 1.4497 Australian dollars)

Australia home prices slip in June as Sydney, Melbourne drag
 

Related Articles

U.S. manufacturing production accelerates in July
U.S. manufacturing production accelerates in July By Reuters - Aug 16, 2022 2

WASHINGTON (Reuters) - Production at U.S. factories increased more than expected in July as output rose at motor vehicle plants and elsewhere, pointing to underlying strength in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email