House prices keep dipping

BUT PANIC NEEDLESS

HOUSE prices across the nation have continued to fall despite the spring selling season getting under way.

Prices have fallen by 0.06 per cent nationally, with a 0.11 per cent drop in Australia‘s capital cities, according to PropTrack’s Home Price Index – the smallest fall since the March peak.

Hobart and Canberra led the declines with 0.46 per cent and 0.37 per cent dips respectively, followed by Sydney at 0.21 per cent.

But the dip isn’t a reason to panic, according to property experts, with prices still up 30.2 per cent when compared with pre-pandemic levels.

“Even though we’ve moved into the next phase sooner than expected as the Reserve Bank lifts interest rates, it’s important to put into context what we’ve seen in the past couple of years,” report author and senior PropTrack economist Eleanor Creagh said.

“We have seen that the pace of price calls has moderated significantly with spring selling season under way.”

Sydney’s house prices are 22.8 per cent higher than they were in March 2022, while Brisbane has experienced a 44.2 per cent boost and Melbourne a 15.8 per cent lift.

The decline in prices as interest rates rise should not cause anxiety for homeowners, UTS finance Professor Harry Scheule said.

“A panic would be overstated, I don‘t think there should be panic,” he said.

“The trend can continue, you can expect further interest rate increases but no one expects interest rate increases to continue forever, it will lower at some point.”

Despite further projected declines in property prices across the country, there should be no expectation that the cost of a home will fall below pre-pandemic levels, according to UNSW property and development lecturer Dr Rotimi Abidoye.

“We shouldn’t expect the 30.2 per cent rise to be wiped off the market just like that, it won’t just go back to where it was pre-pandemic,” he said.

The median value of a home in Australia‘s capital cities currently sits at $792,000, while Sydney and Melbourne sit at $961,000 and $805,000 respectively.

“I don’t think the market will crash, because the things that cause a market crash aren’t really happening, the banks are still lending reasonably and people have jobs,” Dr Abidoye said. “There will definitely be some mortgage stress, there will be people who don’t make it out with their property, there’s no doubt about that, but the percentage won’t be high.”

The current housing situation can be described as a “market correction” according to Prof Scheule.

“Currently the Australian economy is strong, we’ve got a historically low unemployment rate and what’s going on with interest rates and house prices is being offset with a strong economy,” he said.