Melbourne and Sydney property markets soften

June 02, 2017
David Wilson

Measures introduced by government and banking regulators designed to slow the property market appear to be working with recent data showing a softening of dwelling prices.

The CoreLogic May Home Value Index results show that capital gains have slowed over recent months with dwelling values edging 0.4% higher over the three months ending May 2017.

Over the past three months, the nation's two biggest markets have slowed considerably, with Sydney dwelling values remaining unchanged while Melbourne values increased by 0.7%.

The recent announcement by the Australian Prudential Regulation Authority (APRA) for a new round of measures aimed at slowing the pace of interest only lending may also be starting to bite. These measures have seen mortgage rates continuing to trend higher, particularly for investors.

Both state and federal governments have also recently announced measures to reduce the level of foreign ownership through caps on foreign ownership of new developments and higher taxes and charges.

While May is traditionally a soft month for property growth, it will be interesting to see whether this softening becomes a more long term trend in the second half of the year.

The full CoreLogic results and commentary can be viewed here.

Posted in: Property market

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