Australia’s housing market is continuing to track sideways, with the latest RP Data-Rismark house price index showing national priced dipped by 0.2% in August.
The slight fall follows a 0.4% rise in July, and suggests house prices are likely to remain flat for the remainder of the year after peaking in May.
While national house prices have risen 8% in the last 12 months, the figures for the latest quarter shows prices are clearly cooling.
In the three months until the end of August prices in Sydney rose by just 0.2%, while prices in Melbourne dropped 1.5%.
Prices in Perth fell a massive 4.8%, while Brisbane prices have slipped 2.3% in the last three months.
Hobart was the best performing capital city, with home values lifting 1.4%, while Canberra prices increased 1.2% in the quarter.
The national median house price now stands at $410,000, down from $415,000 in July.
Rismark chief Christopher Joye is forecasting no capital growth in the second half of 2010 and says the likelihood of between four and six rates rises over the next 12 months means prices are likely to tread water next year as well.
“If the resources boom combined with frisky consumer spending compel the RBA to lift the cash rate four to six times by end 2011, we would expect to see nominal dwelling values decline modesty,” he says.
“Since 1993 there have been five instances when the RBA has lifted the cash rate sharply. On every single occasion national capital city dwelling prices have flat-lined or declined. If the RBA aggressively raises rates, there is no reason to expect 2010-11 to be any different.”
CommSec chief economist Craig James said the market was cooling, but is unlikely to collapse.
“Property prices are still up 8% on a year ago – in line with our long held view that price growth would moderate to between 5-8% over 2010. Population growth is strong, vacancy rates are low and unemployment is sliding – all conducive for to a more optimistic longer term view of the domestic housing market.”
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
