In minutes released from the February Monetary Policy Meeting of the Reserve Bank Australia,board members noted that the marked drop in housing prices in Sydney (12%) and Melbourne (9%),
since their respective peaks in 2017, was “unusual” given the current low mortgage interest rates
and declining unemployment.
Reserve Bank of Australia, Minutes of the Monetary Policy Meeting of the Reserve Bank Board, 5 February 2019,
Elsewhere in Australia, housing prices fell in Perth and Darwin, remained flat in Adelaide and Brisbane,
but increased in Hobart and Canberra during 2018.
Overall, Australian house prices are down by 8% and now sit “back around mid-2016 levels”, the board said.
Why have house prices dropped?
The drop can be attributed partly to the fact that “the supply of housing does not respond quickly to changes
in demand”, according to the RBA.
House prices peaked in 2017 when housing supply across Australia had not increased sufficiently to match
rapid population growth and the board noted there is now a visible decline in demand from foreign buyers,
contributing to an overall lower demand for housing.
Is now the time to buy property?
With house prices at a low across much of Australia and the official cash rate on hold at 1.50%, 2019
could be the year to take a step onto or up the property ladder.
Contact us for a free consultation on how to get started!
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