Housing and unit values dropped in the September quarter, reflecting the increasing property weakness in Australia before successive interest rate cuts were made.
Liam O'Hara, a senior economist for Australian Property Monitors, said he foresees property prices continuing to fall moderately over the next six months. But the time for buyers to get into the market may be at hand, or not far off, he said.
"This is a good sign for potential buyers," he said. "Only when they believe prices have fallen enough, and the economy gains upward momentum, will confidence return to more positive levels."
O'Hara said he didn't assume the successive drops of 1% and 0.75% in the official cash rate in October and November respectively would result in a full market recovery.
"Dramatic reductions in the official interest rate as witnessed in early October and November will lift confidence and help stabilise property prices in the short term," he said.
"However, if economic growth continues to decline, feeding into significantly higher unemployment, then the outlook is certain. Property prices and activity will drop and further official interest rate cuts may be needed," O'Hara continued.
What's been a down year for many of those looking to sell a home has had the opposite effect for buyers. "Over the year, Sydney witnessed a 3.1% drop in median house prices, which is an approximate saving of $17,000 for potential buyers and investors when compared to this time last year," said O'Hara.
First homebuyers in Sydney taking advantage of this can couple that with up to $24,000 in government grants, although O’Hara still described the current national market as "over-inflated".
Perth has had the worst overall performance of any state capital over the past year, with house and unit prices falling 3.4% and 4.2% respectively in the September quarter. Compared to a year earlier, house prices in Perth fell 6.7%, and unit prices fell 4.8%.
Sydney, Brisbane, Canberra and Hobart also all showed negative quarterly growth for houses. Units in Sydney, Melbourne, Brisbane and Canberra also recorded negative quarterly growth.
Conversely, Darwin house and unit prices grew 1.4% and 8.2% respectively in the September quarter.
Over the year, Darwin house and unit prices rose 9.4% and 7.7%. Adelaide also showed mostly positive gains, growing over the quarter by 1.2% for houses and remaining flat for units, while over the year house prices jumped a capital city high of 11.5% and units rose 8.8%.
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