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Australian home prices slip in March as Sydney weighs: CoreLogic
[SYDNEY] Home prices across Australia's major cities slipped for a sixth straight month in March as tighter lending rules clamped down on investment demand in Sydney and Melbourne, although some other centres fared better.
Property consultant CoreLogic said on Tuesday its index of home prices for the combined capital cities slipped 0.2 per cent in March, after it fell 0.3 per cent in February.
Annual growth in prices slowed to just 0.8 per cent, from 2 per cent in February and 10.5 per cent in the middle of 2017.
Prices in Sydney dropped 0.3 per cent in March, leaving values down 2.1 per cent on the year. Values had been surging at more than 20 per cent a year at the peak of the boom.
Melbourne saw a dip of 0.2 per cent in the month, although annual growth stayed positive at 5.3 per cent.
Home prices outside the major cities edged up 0.4 per cent in March to be 2.6 per cent higher on the year. Combined, prices across the nation were flat for the month and up 1.2 per cent for the year.
"The stronger combined regional markets performance continues a trend that began to emerge in October last year,"noted CoreLogic head of research Tim Lawless.
The cool-down in the major cities has been much desired by Australia's bank watchdog. It tightened standards on investment and interest-only loans, leading banks to raise rates on some mortgage products.
The Reserve Bank of Australia has also been concerned that debt-fuelled speculation in property could ultimately hurt both consumers and banks.
The inexorable rise of prices in the major cities put homes out of the reach of many first-time buyers, becoming a political flashpoint.
Yet the boom has also been a boon for household wealth, with the government statistician estimating that housing stock is worth a heady A$6.9 trillion (S$6.94 trillion) - four times the size of annual gross domestic product.
The explosion in wealth had helped offset weakness in wages, so a sustained downturn in home prices could now act as a drag on consumer confidence and spending.