Australia: Correction in dwelling prices continues - Westpac

Matthew Hassan, Research Analyst at Westpac, notes that Australia's housing market continues to correct as the CoreLogic home value index, covering the eight major capital cities, fell 0.6% in July to be down 2.4%yr and 2.8% from its peak in September last year.

Key Quotes

“The correction continues to be concentrated in the previously strong Sydney and Melbourne markets.”

“Houses and units recorded similar sized falls in the month, down –0.6% and –0.5% respectively. The pace of declines has also been similar over the last 3mths, compared to the earlier part of the correction which was led by houses. The price decline vs a year ago remains much milder for units (–0.5%yr vs –3.1%yr for houses).”

“The spread of weakness across price tiers and geographies was a notable feature of the July update. Our estimates suggest just over 80% of all dwellings (by share of dwelling stock) recorded a price decline in the month. That compares to fewer than 50% of dwellings seeing price declines over the last year and may be an indication that the July weakness relates to changes in mortgage lending criteria affecting borrowing capacity across the spectrum.”