The Australian property market is pointing to stabilising past the short term after the March quarter recorded a price decline, according to the latest data.
Data from the Real Estate Institute of Australia (REIA) showed that the weighted average median house price declined by 2.2 per cent and other dwellings declined by 1.4 per cent.
These declines are a good sign, according to REIA president Adrian Kelly, as while declines have been consistent since June 2018 for both houses and other dwellings, there are other factors at play that indicate a stable property market.
“With the election out of the way and no change in property taxation, a cut in official interest rates in June and the possibility of a further cut later this year, we should see the market, which is already showing signs that the rate of price falls is declining, stabilise,” Mr Kelly said.
“The rate cut, unlike the last series of cuts in 2015 and 2016, which stimulated investor activity, will benefit first home buyers who have seen their numbers decrease nationally to 23,403 in the March quarter 2019, down 19.7 per cent for the quarter and a decrease of 11.6 per cent compared to the corresponding quarter in 2018.”
Over the quarter, the weighted average median price for houses for the combined capital cities fell to $722,028, which represented declines in all capital cities with the exception of Adelaide and Darwin, while other dwellings fell to $568,584, which represented declines in all capital cities except for Adelaide and Hobart, according to Mr Kelly.
Financing for both investors and owner-occupiers declined by 20.7 per cent and 21.6 per cent, respectively, which Mr Kelly said was due to APRA’s prudential controls and banks changing how they lend after the end of the banking royal commission.
“For owner-occupied finance, it’s the largest quarterly decline since March 2010, and for investor finance, the largest decline since March 2004,” Mr Kelly added.
Median rent for three-bedroom houses and two-bedroom other dwellings over the quarter saw rises or remained stable in every capital city bar Darwin, which declined, he said.
The rental market also saw some tightening over the quarter, as Mr Kelly said the weighted average vacancy rate across the combined capital cities declined to 2.8 per cent.