(Bloomberg) -- Sydney home prices declined for a third straight month in April, weighing on national property s as buyers hunkered down ahead of expected interest-rate increases.
Sydney recorded a 0.2% drop, while Melbourne was flat, CoreLogic Inc. said in a report Monday. Prices still advanced across the nation’s other major cities, gaining a monthly 0.3%, as these markets tend to lag the two largest ones.
Australia, like much of the developed world, recorded significant property gains through the pandemic after the Reserve Bank slashed rates to near zero to help prop up the economy. But rising expectations of policy tightening in the months ahead, together with already very high house prices, is beginning to cool buyer ardor.
“With the RBA cash rate set to rise, potentially as early as tomorrow, we are likely to see a further loss of momentum in housing conditions over the remainder of the year,” said Tim Lawless, research director at CoreLogic. “As the cash rate rises, variable mortgage rates will also trend higher, reducing borrowing capacity and impacting borrower serviceability assessments.”
The central bank meets on Tuesday and is widely expected to hike its cash rate by 15 basis points to 0.25%, the first increase since 2010.
Today’s report showed annual growth in home s slowed to 16.7% over the 12 months through April, from a recent peak of 22.2% for the year through November 2021.
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