Australia home prices stall as Sydney loses momentum
Melbourne, Brisbane and Perth see gains in values in December
Australian home price growth stalled in December as tighter lending rules and higher mortgage rates took the heat out of the Sydney market, though the overall result masked wide differences across the major cities.
Figures from property consultant CoreLogic RP Data showed its national index of prices was unchanged in December after a decline of 1.4 per cent the month before.
Annual growth in home values slowed further to 7.8 per cent from 8.2 per cent in November and a cycle peak of 11.5 per cent.
Much of the weakness was concentrated in the once-high-flying Sydney market, where prices fell 1.2 per cent in December, taking the drop in the fourth quarter to 2.3 per cent.
Yet prices were still up more than 11 per cent for 2015 as a whole.
Values fared better in Melbourne, Brisbane and Perth, which all saw gains in December.
“The wealth created from housing in Sydney and Melbourne has been exceptional over the past 12 months,” said RP Data’s head of research Tim Lawless.
Median values for Sydney homes rose about A$82,000 for the year to A$800,000, while Melbourne put on A$60,400 to A$610,000.
The recent slowdown in prices follows efforts by regulators to tighten lending standards for property investment with the aim of keeping annual growth in loans at 10 per cent or less.
The major Australian banks also announced increases in mortgage rates both for investors and home owners, blaming higher regulatory costs.
The cooling in prices has been welcomed by the Reserve Bank of Australia, which has been worried that excess borrowing for home investment could lead to a bubble.