Australian home prices slipped for the 11th straight month in August as losses in Melbourne accelerated while Sydney remained weak, data showed on Monday.
Property consultant CoreLogic’s index of home prices nationally dropped 0.3 per cent in August, leading to an annual fall of two per cent.
Values in the combined capital cities fell 0.4 per cent in the month and 2.9 per cent for the year.
Prices outside the cities eased 0.2 per cent in August but were still 1.6 per cent higher on a year earlier.
‘Weaker housing market conditions can be tied back to a variety of factors, foremost of which is the tighter credit environment which has slowed market activity, especially amongst investors,’ said CoreLogic head of research Tim Lawless.
Regulators have clamped down on risky lending by banks, particularly for interest-only loans, while a raft of scandals across the industry has added to the air of caution.
Westpac last week also raised its mortgage rates to protect profit margins in the face of higher funding costs in the wholesale market.
The slowdown has been greatest in Sydney where prices were down 5.6 per cent on the year, though Melbourne was starting to catch up with an annual drop of 1.7 per cent.
Sydney and Melbourne comprise about 60 per cent of Australia’s housing market by value and 40 per cent by number.
The weakness was concentrated in the premium sector of the housing market in Sydney and Melbourne, with less expensive property faring much better, noted Lawless.
‘Stronger market conditions across Australia’s more affordable areas are likely attributable to a rise of first home buyers in the market as well as changing credit policies focused on reducing exposure to high debt-to-income ratios,’ he added.