Home prices have recorded their first slowdown in six months, with Melbourne leading a fall that could ease pressure on calls to introduce measures to cool the housing market.
Home values fell 0.3 per cent across capital cities for November, although year-on-year growth remains positive, at 8.5 per cent.
CommSec’s chief economist Craig James said the fall was a result of supply picking up and demand tapering off “in line with higher prices”.
“The market is correcting itself off its own accord, which suggests there’s no need for the Reserve Bank to intervene with so-called macroprudential controls,” he said.
Melbourne recorded the biggest monthly fall, down 2.6 per cent. Home values in Sydney and Perth rose 1 per cent and 0.9 per cent respectively, the largest rises. Brisbane and Hobart recorded smaller rises, with all other cities down.
The strong growth in home values has almost entirely been caused by a booming market in Sydney and Melbourne. Home values in Sydney have increased by 13.2 per cent for the past 12 months, according to the CoreLogic figures.
“Four markets were higher, four were lower, so there hardly seems to be a uniform boom,” Mr James said.
“Home prices will continue to ease off to more sustainable levels, and we’re going to see a substantial easing of capital growth in Sydney as some of the new apartments come on to the market.”
CoreLogic research analyst Cameron Kusher said home value growth had peaked in April, when year-on-year growth hit 11.5 per cent.
Mr Kusher said all capitals had now past their cyclic peak.
“Market indicators such as auction clearance rates remain quite strong, but also point to slightly weaker overall housing market conditions,” Mr Kusher said, noting the total number of property listings had also started to trend higher.
“This may indicate a slower rate of sale and is indicative of mounting stock on the market.”
But inner-city Melbourne agent Tom Roberts, of Nelson Alexander, remains optimistic.
“From our point of view, our area hasn’t appeared to slow down. We’re in the city and that’s remained strong,” he said.
“I’ve certainly seen the figures that point to price growth slowing, but those broadbrush numbers don’t take into account some areas are slowing and some are not.”
This article was first published on The Australian Business Review.