No Relief For Home Sellers as Australia Housing Slide Enters 2nd Year
(Bloomberg) -- Australia’s housing slump entered its second year as lending curbs and buyer nerves saw prices fall again in October.
- Average property values declined 0.5 percent last month, taking the annual decline to 3.5 percent -- the weakest performance since early 2012, according to CoreLogic Inc. data released Thursday.
- Sydney and Melbourne, the hottest markets when property prices were surging, are now leading declines. Prices in Sydney are down 7.4 percent from a year earlier, while Melbourne’s market is off 4.7 percent.
- The top end of the market is being hardest hit. In Sydney, prices in the top quartile have fallen 8.6 percent, while at the cheaper end of the market prices are down 4.6 percent.
- Credit availability is the biggest factor weighing on the market. Regulators have tightened restrictions on riskier loans, such as interest-only mortgages which are popular with property investors, while also enforcing stricter expense verification, which is reducing the amount people can borrow.
- With credit harder to come by and little prospect of capital growth, investors are exiting the market, a boost for owner-occupiers and first-home buyers.
- Inventory levels are increasing as sales slow and more properties come on to the market. As buyers gain a stronger hand, price declines are expected to continue through the peak November and December selling season, CoreLogic said.
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