Ongoing weakness in prestige property markets is one driving force behind the broader market’s poor performance.
RP Data’s research analyst Cameron Kusher said, excluding Sydney, continuing weakness within the premium housing sector has resulted in value falls across most markets.
According to RP Data's Hedonic Home Value Index, the top 20 per cent of Australia’s suburbs fell 3.3 per cent in value over the year to March 2011.
In contrast, values across the broad middle 60 per cent of suburbs were virtually flat as were the most affordable 20 per cent of suburbs which were up 0.3 per cent over the year.
Mr Kusher said there was no doubt that all three sectors had recorded a marked slowdown in capital growth during recent months.
“In the major capitals, the market performance over the year has actually been quite different apart from in Adelaide; in all other capital cities, the top 20 per cent of suburbs have been the weakest performers,” he said.
Annually, the March results showed that values across Brisbane’s premium suburbs have fallen significantly, dropping by 8.2 per cent with a 4.5 per cent fall recorded over the last quarter alone.
Perth’s top end fell by even more, sliding 11.8 per cent over the year, with an 8.4 per cent fall last quarter. Mr Kusher said these results highlight the ongoing and growing weakness within the premium sectors of these two cities.
During the last quarter, the most affordable 20 per cent of suburbs have been the best performers in each city except Sydney.
"Given that value growth has stalled and is running well below inflation it may be an indication that values at the lower end of the market at least, are becoming more attractive to purchasers. In saying this, don’t expect a rush of growth because rents are still generally more affordable than servicing a mortgage,” Mr Kusher said.
“Over the coming months we anticipate that the weakness in the premium sector is likely to persist however, falls are not expected to be as substantial as those in recent times.”