(Bloomberg) -- Australian property prices posted the smallest monthly decline in a year in May, adding to signs the worst of the housing downturn has passed.
- Housing values nationally fell 0.4% last month, compared to a 0.5% decline in April, according to CoreLogic Inc. data released Monday. From a year ago, prices declined 7.3%.
Key Insights
- The housing market has been given a triple-whammy of confidence-boosting news in recent weeks: Labor's surprise election loss killed off its plans to wind back tax breaks for property investors; the banking regulator has proposed easing stress-test buffers for mortgages; and the central bank is likely to cut interest rates Tuesday.
- That renewed confidence has started to show up in auction clearance rates, which topped 60% in Sydney in the last week of May for the first time in a year.
- Even so, there's still areas of sustained weakness, particularly in smaller cities and regions hit hardest by the mining downturn. Perth property values fell 1% last month to the lowest since 2006.
- Don't expect a sudden turnaround, though. Banks are still taking a tough stance verifying borrowers' spending and income, while an interest-rate cut signifies the economy is weakening, said CoreLogic's head of research Tim Lawless. Slowing jobs and wages growth could be a further brake on the market.
Read More
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- Australia, World's Most Enduring Growth Story, Starts to Wobble
- Morrison Pledges to Cut Aussie First-Home Owner Deposits to 5%
To contact the reporter on this story: Peter Vercoe in Sydney at pvercoe@bloomberg.net
To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Edward Johnson
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