In November, Australian capital city dwelling prices, as measured by the CoreLogic RP Data Hedonic Home Value Index, fell 1.5% and are down 0.5% over the past three months. Melbourne saw the largest fall with a monthly decline of 3.5%, while prices in Sydney fell 1.4%.
Reversing past trends, prices in Brisbane, Perth and Adelaide rose in November. Over the past year capital city dwelling prices are 8.7% higher, driven by strong gains in Sydney (+12.8%) followed by Melbourne (+11.8%), however, the annual rate of growth in property prices has slowed from peak rate of 11.5% in April 2014.
Auction clearance rates have declined to about 60% while the average selling time and vendor discounting rates continue to rise off recent lows. The property market is clearly cooling as a result of deterioration in affordability due to higher prices and marginally higher mortgage rates. Additionally, tighter lending standards has also seen a decline in investor participation in property purchases from 54% of all purchases in May 2015 to 45% at the end of September.
On the supply side, in trend terms, total residential building approvals continue to decline from their March peak but at a slower rate of decline than in prior months due a rebound in apartment approvals in NSW, Victoria, and South Australia which are showing some degree of resilience.
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