Australia - CoreLogic house prices for May -1.1% m/m

The CoreLogic May Home Value Index

Down 1.1% m/m in May

• Declines in Sydney and Melbourne (dwelling prices have recorded significant gains over the current growth cycle to date)           
  


• Dwelling prices edging 0.4% higher over the three months ending May 2017

CoreLogic comments (bolding mine):

• "The past three months has seen capital city dwelling values rise by a modest 0.4%, with four of the eight capitals recording a fall.  Over the past three months, Sydney dwelling values are unchanged while Melbourne values have increased by 0.7%."


• "The trend in growth rates across the smaller capital cities was mixed with dwelling values across Brisbane and Adelaide continuing to inch higher while values in Perth and Darwin showed further easing over the most recent rolling quarter.  A steep drop in the Hobart index has reversed the gains recorded over the previous quarter and the Canberra index was also -1.5% lower over the past three months."


• "The May home value results should be viewed in the context of demonstrated seasonality; values have fallen during May in four of the past five years.  Reading through the seasonality indicates that value growth in the market has lost momentum, particularly in Sydney and Melbourne where affordability constraints are more evident and investors have comprised a larger proportion of housing demand."


• "Adding to the complexity in reading the current market is the recent Australian Prudential Regulation Authority (APRA) announcements at the end of March for a new round of macroprudential measures aimed at slowing the pace of interest only lending."


• "Mortgage rates are continuing to trend higher, particularly for investors."


• "Another factor that is likely contributing to slower growth conditions is a dent in consumer confidence.  Consumer sentiment towards housing, as measured by Westpac and the Melbourne Institute, has shown a marked downturn in May."


• Other market indicators suggest a slower pace of growth such as a reduction in market activity, a moderating trend in auction clearance rates and rising advertised stock levels.


• "It appears that housing activity has eased which is attributable to a range of factors including affordability constraints, tighter credit policies, rising mortgage rates and a downturn in consumer sentiment towards housing."

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House prices have surged, so some signs of a slowdown will be welcomed by those wanting to but and those concerned about inflated prices. CoreLogic"s comments provide a good summary of various factors influencing this market.

Australia - CoreLogic house prices for May -1.1% m/m
Australia - CoreLogic house prices for May -1.1% m/m
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