Australia’s Housing Boom Shows Signs of Slowing
Australia’s housing boom is showing some signs of slowing as the rapid rise the past six months begins to constrain affordability and dampen demand.
Nationwide dwelling values rose 1.8% in April, the slowest pace since January after last month’s record rise, CoreLogic Inc. data released Monday show. Capital city prices also gained 1.8%, led by Darwin and Sydney, data show.
House price gains could slow over the coming months as a lift in the number of houses for sale and affordability constraints dampen demand, said Tim Lawless, head of research at CoreLogic. “With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs.”
Australia’s property prices have surged 7.8% the past year, fueled by record low borrowing rates, an improving economic outlook, an under-supply of new houses and government incentives. While housing prices are climbing from Singapore to Canada and the U.S., a return to boom times in Australia threatens to swell an already worrisome pile of household debt.
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