The price of Australian real estate continued to fall in the March quarter, as the growing cost of living and buyer caution took its toll on the market.
New data from the Real Estate Institute of Australia (REIA) found the median price of both houses and other dwellings (units) decreased by 2.5 per cent to $532,695 and 1.8 per cent to $422,947 respectively, over the March 2011 quarter.
“This represents a deceleration in property prices after a period of solid growth in previous quarters. We are witnessing the impact on prices of increases in cash rates during the second half of last year, rises in the cost of living have restrained household spending and the natural disasters in Queensland have also significantly affected the property market,” REIA president David Airey said.
With the exception of Sydney and Adelaide, all Australian capital cities recorded median house price declines over the quarter.
“Melbourne house prices recorded the largest drop over the quarter, down six per cent to $565,000. The largest increase in median prices was evident in Sydney, up 1.1 per cent to $637,258,” Mr Airey said.
“In summary, we are seeing a softening of the housing market explained by economic factors, not a bubble starting to burst.”