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SYDNEY: Home prices in Australia's major cities fell 0.3% in April, marking the fourth consecutive monthly fall, with a strong local dollar and a weaker financial sector hitting the market for luxury houses, industry data showed on Tuesday, May 31.
For the three months to April, national city house prices dropped 1.2% from a year earlier on a seasonably adjusted basis, with the median national city dwelling price at A$468,000 (RM1.5 million), according to property consultant RP Data-Rismark.
"Expatriates are less likely to buy luxury Australian homes because of the high dollar," said Christopher Joye, RP Data-Rismark joint managing director.
"The financial services sector, which has been a key driver of luxury demand, is growing much much more slowly that it has in the past," he added.
In Sydney, house values slipped 0.5% in the three months to April on a seasonally-adjusted base, while those for Melbourne were also down 0.8%.
The hardest hit cities included Perth and Brisbane, which saw 3% and 3.1% falls in house prices in the April quarter respectively.
Joye said one of the factors behind the falls were defaults and repossessions rose higher in the two cities during and after the global financial crisis, but said that economic strength from mining sectors should help prices to stabilise.
"Assuming that the resources story stays on track, the dwelling value would find a base," he said.
The Australian housing market, which is regarded by some analysts as one of the most over-valued in the world, has been cooling partly due to higher mortgage rates.
RP Data-Rismark said the lower end of the market, meanwhile, was holding firm.
"The solid performance of cheap suburbs runs against the grain of popular claims that default rates are rocketing up amongst first-time buyers," said RP Data-Rismark's research director Tim Lawless. — Reuters
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