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Matthew Hassan, Senior Economist at Westpac, notes that Australia’s housing markets continue to correct as the CoreLogic home value index, covering the eight major capital cities, dipped 0.2% in May marking the eighth successive monthly decline.

Key Quotes

“Prices nationally are down 1.1%yr and down 1.9% from their peak in Sep last year.”

“The most disaggregated price data suggest over 40% of properties nationally are now experiencing annual price declines – up from a third last month and just 10% a year ago. The incidence of declines is still narrower than that seen during the bigger price corrections in 2011-12, 2008-09, the mid 2000s and the mid-90s.”

“For the May month, unit prices showed a slightly sharper fall than houses (-0.3% vs -0.2%) although annual growth remains positive (+0.9%yr) compared to negative for houses (-1.7%yr).”

“Overall, the May update again extends and deepens the price correction. With latest auction market data showing a further weakening in Sydney and Melbourne through June and some tightening in lending criteria likely coming through as well, any stabilisation still looks to be a long way off.”