Property prices fall 1.6% in September quarter but rate cut may stimulate market

The underwhelming spring selling season has been underlined again, with property prices now falling for a fifth consecutive quarter in September, and Brisbane now the cheapest capital city at a median price of $429,339, according to the latest figures released by Australian Property Monitors.

The figures come as clearance rates have failed to rise above the mid-50s this season, despite the number of properties on the market continuing to increase.

The APM figures show prices fell across the country by 1.6% during the quarter, and by 3.5% during the year.

The biggest declines were seen in Brisbane, which fell by 2.7% in the quarter and by a massive 6.7% over the year, to a median price of just $429,339.

In the quarter, Sydney prices fell by 1.8%, Melbourne by 0.9%, Adelaide by 2%, Canberra by 1.4%, and Perth and Darwin by 1.6% each. Hobart prices remained flat.

Over the year, Perth prices fell 5.7%, Melbourne by 3.2%, Sydney by 1.6%, Hobart by 2.4%, Darwin by 0.3%, Adelaide by 5.1%, while Canberra prices rose by 0.9%.

The results are slightly worse for units. Over the quarter, nationally prices fell by 0.6%, with the worst result in Darwin, where prices fell 5.1%.

Canberra prices fell 4.9%, Adelaide by 1.8%, Sydney by 0.4% and Perth prices fell by 3.4%.

Over the year, Perth prices fell .3%, Canberra fell 5.8%, Adelaide dropped 2.8%, while Melbourne prices fell by 1.6%.

While APM economist Andrew Wilson says that while the figures are disappointing, there is some hope, pointing to recent ABS figures for home loan commitments.

The possibility of an interest rate cut on Tuesday, he says, could also help buyer confidence.

“If there is a rate cut, it will restore a bit of confidence. I don’t think it’ll light the fuse under the market, but provide it with a little bit of a boost. We see a lot more stock coming on over the next few months, so we might see the buying pick up if that occurs.”

Economists have increased their expectations for a rate cut after yesterday’s release of official inflation data. Wilson says the RBA will be encouraged by the fact they are not at risk of inflating the market if a rate cut is made.

“What we’re seeing here is a quite reasonable correction phase, and in any case, September is always a quiet month in terms of housing price growth.”

“We always expected this period to be lower than the previous quarter. There may very well be some more activity over the next few months.”