National home prices fall again

NATIONAL home prices have fallen for the eighth consecutive month, largely due to rising interest rates, according to the latest data from PropTrack.

A 0.16 per cent drop was recorded nationally in November, with capital city prices now 3.09 per cent below their level a year ago.

Darwin and Melbourne had the largest declines, but prices in Adelaide climbed 0.25 per cent to a new peak.

PropTrack senior economist Eleanor Creagh said rising interest rates had quickly “rebalanced” the housing market following last year’s “extreme” growth.

“National home prices have fallen for the eighth month in a row, with the fastest interest rate tightening cycle since the 1990s weighing on home prices in most parts of the country,” she said.

“Though the pace of price falls remains significantly less than the larger falls seen in June and July when interest rates first started rising, the downturn has continued to deepen as interest rates continue to rise.”

Ms Creagh said a further 0.25 per cent interest rate rise in December, which would take the cash rate above three per cent, was “all but certain”.

“With additional rate rises on the horizon, borrowing costs will continue to increase and maximum borrowing capacities will further reduce,” she said.

“The significant reduction in borrowing capacities implies further price falls.”

But Ms Creagh predicted price falls were likely to ease once interest rates stopped rising next year.

Prices fell 0.14 per cent and are now down 6.44 per cent over the past year.

A slight fall of 0.04 per cent in November now has Brisbane at 2.71 per cent below its peak, which was in April. “Brisbane is the second strongest capital city market, with prices up 4.72 per cent over the past year,” Ms Creagh said.