03/11/2008 - 09:46

Perth leads housing downturn: ABS

03/11/2008 - 09:46

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Perth has recorded the biggest fall in house prices over the past year as latest figures from the Australian Bureu of Statistics confirm a slowdown in the national housing market.

Perth leads housing downturn: ABS

Perth has recorded the biggest fall in house prices over the past year as latest figures from the Australian Bureu of Statistics confirm a slowdown in the national housing market.

Over the year to September, Perth's weighted average house price has fallen 4.1 per cent, the largest recorded fall of any capital city in Australia.

In comparison, national figures recorded a rise of 2.8 per cent over the same period.

During the September quarter, the house price index in Perth fell 1.1 per cent compared to the previous quarter.

Brisbane recorded the largest fall during the quarter, with the average price falling 3.3 per cent, followed by ACT down 2.5 per cent and Melbourne with a fall of 1.9 per cent.

The national house price index fell 1.8 per cent in the September quarter compared with an upwardly revised 0.2 per cent fall in the June quarter.

Economists had expected a national fall of 0.5 per cent for the September quarter and a rise of 4.0 per cent in the year to September.

ICAP senior economist Adam Carr said the fall in house prices would not improve housing affordability as the prospect of lower property price returns discouraged builders from putting up new dwellings, which are needed to alleviate the housing shortage.

"If we don't want growth to collapse in this economy we need housing construction but investment is held up," he said.

"Housing won't be built if house prices are falling."

In the September quarter, Brisbane had the steepest house price decline of 3.3 per cent, followed by Canberra's 2.5 per cent decline.

Annually, Perth had the biggest fall of 4.1 per cent.

Conversely, Adelaide had Australia's highest house price rise of 9.7 per cent in the year to September.

Housing Industry Association data released last week showed new home sales in September had fallen to a decade low.

Westpac economists said in a research note that high interest rates and constrained credit market conditions, which had squeezed non-bank lenders out of the market, had put the housing market under pressure.

But they said the housing market was likely to improve, as the Rudd government's stimulus package - which triples the first-home buyers grant for new dwellings to $21,000 - boosted demand for homes.

"Aggressive interest rate cuts and the temporary increase in the first home owners grant should go some way towards shoring up market conditions in the December quarter but negative pressures are likely to continue," Westpac said.

ANZ economists said Australian house prices were likely to fall as the economy weakened, but the housing market situation would not be as dire as the US.

 

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