Beautiful service from this Property Management Company. Walked into the office a week ago looking for a rental, was absolutely greeted with smiling faces and enthusiastic team members, while everyone did come out to greet me... Got a call back the same day saying I had been approved!! Very efficient work from Rental Trends, fastest I've seen! I am very happy with my choice of agency and property considering i was looking quite urgently, the... Robert Golding
Australian property values fell $133.1 billion in the December quarter, with capital city home prices down an average of 2.4 per cent across the nation.
Figures from the Bureau of Statistics show Sydney and Melbourne continued to lead the falls, with a 3.7 per cent and 2.4 per cent fall respectively.
There were smaller quarterly falls in Brisbane (-1.1 per cent), Perth (-1 per cent), Darwin (-0.6 per cent) and Canberra (-0.2 per cent).
Adelaide (0.1 per cent ) and Hobart (0.7 per cent) were the only two capital cities where prices rose in the final three months of last year.
Hobart was the only city to record a large property price rise in 2018 (9.6 per cent), while Canberra and Adelaide home values edged higher.
Every other capital fell, led by Sydney's 7.8 per cent slump, with Melbourne not too far behind.
"Investors were a key driver of price growth through their upturns and the fall in investor demand is now underpinning the decline in prices," BIS Oxford Economics senior manager Angie Zigomanis said.
"The weakness in prices and likely concerns about further falls will continue to play on purchaser sentiment through 2019, with further price falls in Sydney and Melbourne expected."
Sydney, Melbourne downturn 'twice as fast as average'
Mr Zigomanis recently completed an analysis of the recorded property downturns in Australia's capital cities.
He looked at "real" price falls, which is where inflation is factored in — general price and wage rises were much higher in the 1980s than they are now, meaning that stable house prices back then resulted in significant real declines in value.
In real terms, Sydney house prices have declined 16 per cent since the last peak in June 2017, which is about three-quarters of the average 21 per cent real decline in prices during previous downturns.
However, in this downturn the price declines have occurred about twice as quickly as average.
The longest downturn recorded was 23 quarters during the first half of the 1980s, which resulted in a total real house price decline of nearly 34 per cent, meaning Sydney still has a way to go to beat that record.
While not yet as large, Melbourne's current real house price fall of 14 per cent has been even steeper, occurring over just four quarters, and is so far the fastest slump on record in that city.
Melbourne's worst-recorded housing downturn was a 25 per cent slide between late 1976 and early 1983.
"So far, the period of decline in these two markets has been much shorter than the longest downturn duration and around half of their respective average downturn lengths in both the house and unit markets," Mr Zigomanis said.
"Therefore it is foreseeable that the current downturn in the Sydney and Melbourne markets may have at least another year to run before reaching the cyclical trough."
In both Sydney and Melbourne, unit prices have so far fallen less in the current downturn than house prices, although the gap is much greater in Melbourne, where unit prices did not rise as much as in Sydney.
"The disparity in the rates of decline between houses (-14 per cent) and units (-6 per cent) has been predominantly as a result of the sharper acceleration in house price growth in the lead-up to the downturn, with houses rising by 52 per cent in the five years to December 2017, compared with a 14 per cent rise in unit prices," Mr Zigomanis explained in the report.
Price falls spreading beyond the two biggest cities
However, the opposite has been the case in Perth, where apartment prices have fallen substantially more than houses in the current downturn, the city's worst on record.
Mr Zigomanis said there was little light on the horizon for long-suffering Perth property owners.
"The ongoing oversupply in Western Australia, combined with its weak economic and population environment, will continue to drag on prices in both the unit and separate housing markets in the year ahead," he wrote.
"However, given the already extended nature of Perth's downturn, the rate of decline in prices is expected to begin to ease."
Mr Zigomanis also pointed to the latest ABS data as an indication that the Sydney and Melbourne-led downturn was beginning to spread to other areas.
"It's been a mixed bag across the other markets, although with the 1.1 per cent decline in the Brisbane index in the quarter also concerning given that prices have been flat for most of the year, there is a danger that prices could fall further," he warned.
"The modest growth in the index in Hobart in the December 2018 quarter and fall in Canberra suggests that the rise in these markets is now running its course, with price growth to potentially flatten out over 2019."