House prices fall 0.7% in June, first decline in 17 months

Housing prices fell by 0.7% in June, the first decline in 17 months, with RP Data figures showing interest rates and the decline in Government stimulus assistance are slowing down the property market.

The RP Data-Rismark Hedonic Home Value Index seasonally adjusted figures reveal house prices grew by just 0.1% over the quarter, with the average quarterly capital growth since 2009 at about 3%.

The data is in contrast with prices released by Australian Property Monitors earlier this week, which recorded a 2.5% increase for the quarter.

But RP Data says its figures are more reliable due to the fact they are compiled on a monthly basis, include different home sizes and locations and are seasonally adjusted.

Rismark International managing director Christopher Joye said in a statement the result isn’t surprising given interest rates have continued to rise to more “normal” levels and sellers are no longer chasing the highest prices possible.

”As mortgage rates have normalised, participants in the housing market have cut their house price growth expectations, which explains the current change in conditions.”

RP Data research director Tim Lawless also said in a statement that while he isn’t surprised, the data is still quite revealing.

“This represents a striking deceleration in the quarterly rate of increase in home values,” he said.

Lawless also told the ABC some cyclical figures are at play, including the election and fears over the share market.