Hobart heats up as house market cools

We’re likely to see lower to negative growth rates across previously strong markets

AUSTRALIA’S property market is showing signs of cooling, with national home prices down in the December quarter and conditions expected to remain softer through 2018.

The national median house price index fell 0.3 per cent in December, weighed down by major falls in Sydney and Darwin and modest weakness across Melbourne and Perth, figures from property data group Corelogic show.

The fall contributed to an overall slowdown in national home value growth.

Although Hobart led the way with home prices rising 12.3 per cent, nationally the fig- ure was a mere 4.2 per cent in 2017 compared to 5.8 per cent in 2016 and 9.2 per cent in 2015.

Head of research Tim Lawless says the transition towards weaker housing market conditions has been clear but gradual, and has been driven by the capital cities which combined tracked half a per cent lower over the December quarter.

“Sydney’s housing market has become the most significant drag on the headline growth figures,” Mr Lawless said.

The harbour city’s prices retreated 0.9 per cent in December to be 2.1 per cent lower over the quarter.

Mr Lawless expects tighter credit policies to be the primary driver for a softer phase in the housing market cycle throughout 2018.

“We’re likely to see lower to negative growth rates across previously strong markets, more cautious buyers, and ongoing regulator vigilance of credit standards and investor activity.”