House prices in Australia’s capital cities have fallen on an annual basis for the first time since 2012.
But the drop, led by falls in Sydney and Melbourne, isn’t considered significant in the scheme of things, given the dizzy heights prices had reached.
Capital city house prices fell 0.7 per cent nationally in the three months to June, according to the latest Australian Bureau of Statistics’ Residential Property Price Index released on Tuesday.
They also fell 0.6 per cent during the year to June 2018, the first annual fall recorded in six years.
Those national falls can be largely attributed to price drops in the big markets of Sydney and Melbourne.
The drop was greatest in Sydney in the June quarter, where house prices fell by 1.2 per cent, marking the fourth consecutive quarter in which they have declined.
Prices in Melbourne fell by 0.8 per cent in the three months to June, the city’s second consecutive quarterly drop.
Less demand for homes and a tightening of lending to investors played a role in the falls, ABS chief economist Bruce Hockman said.
But he has stressed they aren’t significant in the bigger picture.
“These are falls from pretty high levels,” he told AAP on Tuesday.
“Sydney over the last five years is actually up 56 per cent, so in the context of where we’ve come from, these aren’t significant.
“They tend to support those who suggest that we’re probably in for a period of sustained flat prices, rather than any of those catastrophic falls that some of the more dramatic forecasters tend to look at.”
House prices were also down in Darwin (by 0.9 per cent) and slightly down in Perth (by 0.1 per cent).
But prices rose in the June quarter in Brisbane (0.7 per cent), Adelaide (0.3 per cent) and Canberra (0.3 per cent).
They were also up a whopping three per cent in Hobart.
Employment growth in Tasmania and more visits from tourists have likely pushed up prices in the island state’s capital, Mr Hockman said.
“They seem to be outperforming the others for quite a while now, which is unusual for Tasmania,” he said.
“They’re marching to their own drum beat.”
The average price of a home in Australia is now $686,200, the figures show.
The total value of Australia’s 10 million residential properties is $6.9 trillion, which has fallen by $13.3 billion.