21/06/2016 - 11:03

Perth home prices fall as nation drags

21/06/2016 - 11:03

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Perth dwelling prices fell 1.7 per cent in the three months to March, while the average dwelling price across Australia's capital cities also fell for the first time in over three years.

Perth home prices fall as nation drags

Perth dwelling prices fell 1.7 per cent in the three months to March, while the average dwelling price across Australia's capital cities also fell for the first time in over three years.

According to the latest data by the Australian Bureau of Statistics, Perth prices fell 4.5 per cent in the 12 months to March.

The quarterly fall followed a 0.5 per cent rise in the December quarter, and a 2.4 per cent fall in the September quarter.

Attached dwelling prices in Perth, which includes apartments and town houses, fell 1.1 per cent in the March quarter, while house prices fell 1.8 per cent.

In the year to the March quarter, attached dwelling prices fell 3.6 per cent, while house prices fell 4.7 per cent.

The figures compare to the latest CoreLogic RP Data statistics which put Perth’s median dwelling price at $506,000 in May, down 4.2 per cent year-on-year.

The average of Australia’s eight capital cities fell 0.2 per cent in the March quarter; the first fall since the September quarter in 2012.

But it was still up 6.8 per cent in the year to the March quarter.

HSBC economists Paul Bloxham and Daniel Smith expect the property market to cool further over coming quarters, despite a strong price growth uptick for Australia's two largest cities in April and May.

"Tight prudential settings, a significant boost to housing supply and recently increased state taxes on foreign buyers are set to weigh on housing price growth," they said.

HSBC expects national house price growth to slow from 9 per cent last year to about four or 5 per cent this year, and between zero to 5 per cent in 2017.

This slowdown should leave the Reserve Bank with room to consider cutting its cash rate further in coming quarters, HSBC economists said.

"Our central case is for the RBA to cut its cash rate by 25 basis points in August to a new record low of 1.5 per cent, following the second quarter consumer price index print in late July, and then to hold steady in subsequent quarters," they said.

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