AU: Residential Property Prices

Mon Jun 18 20:30:00 CDT 2018

Actual Previous
Q/Q percent change -0.7% 1.0%
Yr/Yr. percent change 2.0% 5.0%

Australia's residential property price index fell 0.7 percent on the quarter in the three months to March, weakening from an increase of 1.0 percent in the three months to December. Year-on-year growth in the index slowed from 5.0 percent to 2.0 percent. The headline index is a weighted average of house prices for the capital cities of Australia's eight states and territories, with prices falling on the last quarter the five of these cities.

Prices fell in Sydney, the largest city, for a third consecutive quarter for the first time since 2008, down 1.2 percent on the quarter after declines of 0.1 percent and 1.4 percent in the two previous quarters. Prices in Sydney also fell on the year for the first time since 2011, down 0.5 percent after an increase of 3.8 percent previously. House prices in Melbourne, the second largest city, fell for the first time since 2012, down 0.6 percent on the quarter after an increase of 2.6 percent previously, with year-on-year growth slowing from 10.2 percent to 6.2 percent. House prices also fell on the quarter in Brisbane, Perth, and Darwin, offset by increases in Adelaide, Hobart, and Canberra.

Today's data are consistent with other indicators pointing to a slowdown in Australia's residential property market, with officials from the statistics bureau and the Reserve Bank of Australia citing the impact of tighter regulatory conditions that have curbed lending to property investors. Officials at the RBA, however, remain concerned that household debt levels are still too high and may reduce the scope for consumer spending to strengthen.

Residential Property Prices provide estimates of changes in housing prices in each of the eight capital cities of Australia along with a weighted average of the eight.

Home values affect much in the economy, especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. Rising prices increase consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.