House prices in capital cities declined on an annual basis for the first time since 2012

Australian house values fall by $13bn in three months as capital city prices slide

House prices in capital cities have fallen on an annual basis for the first time since 2012, with the the total value of Australia’s 10 million residential properties falling by $13.3bn in the three months to the end of June.

Capital city house prices fell 0.7% nationally in the three months to June, according to the latest Australian Bureau of Statistics’ residential property price index, which was released on Tuesday.

They also fell 0.6% during the year to June 2018, the first annual fall recorded in six years.

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Those national falls can be largely attributed to price drops in the big markets of Sydney and Melbourne.

The drop was greatest in Sydney in the June quarter, where house prices fell by 1.2%, marking the fourth consecutive quarter in which they have declined.

Prices in Melbourne fell by 0.8% in the three months to June, the city’s second consecutive quarterly drop.

Less demand for homes and a tightening of lending to investors played a role in the falls, the ABS chief economist, Bruce Hockman, said. But he stressed they were not significant in the bigger picture.

“These are falls from pretty high levels,” he said on Tuesday. “Sydney over the last five years is actually up 56%.

“[These falls] tend to support those who suggest that we’re probably in for a period of sustained flat prices, rather than any of those catastrophic falls that some of the more dramatic forecasters tend to look at.”

House prices were also down in Darwin (by 0.9%) and slightly down in Perth (by 0.1%).

But prices rose in the June quarter in Brisbane (0.7%), Adelaide (0.3%) and Canberra (0.3%). They were also up 3% in Hobart.



Employment growth and more visits from tourists have likely pushed up prices in Tasmania’s capital, Hockman said.

“They seem to be outperforming the others for quite a while now, which is unusual for Tasmania,” he said. “They’re marching to their own drum beat.”

The average price of a home in Australia is now $686,200, the figures show.

The total value of Australia’s 10 million residential properties is $6.9tn.

