House prices fall sharply in December quarter, down 3.3% in 2008

New data from the Australian Bureau of Statistics shows Australian house prices fell 0.8% in the final three months of 2008, taking the total fall for the year to 3.3%.

The fall in the December quarter follows a 1.8% fall in September 2008, the biggest quarterly fall in 30 years.

Melbourne was the hardest hit city in the December quarter, with prices dropping a massive 1.7%. Brisbane was not far behind, with prices sliding 1.2%.

The 3.3% fall in house prices over 2008 is in sharp contrast to recent performance of the housing market. In 2007, prices rose 12.3%, while prices increase by 8.3% in 2006 and 2.3% in 2005.

Perth stands out as worst-performing market in 2008, with prices falling 6.7% as the heat came out of the mining boom. Sydney also had a poor year, with prices falling 4.2%. Prices in Melbourne fell 3.2%.

Only Darwin (a 3.8% rise in prices over 2008) and Adelaide (up 2% in 2008) posted gains.

Most commentators are bracing for a fall in house prices of between 5% to 10% in 2009, although this could worsen sharply if Australia’s unemployment rate rises and home owners are forced to properties on the market. <

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