House price growth slows to lowest level since January

The national property boom slowed dramatically over November with new data showing the nation’s housing prices had their slowest month of growth since January.

Monthly CoreLogic property price figures released on Wednesday morning show dwelling values across the country increased 1.3 per cent last month, with Sydney and Melbourne’s price growth slowing.

The house price boom is slowing.Credit:Morgan Hancock

Sydney house prices increased 1 per cent to $1,360,543 while apartments increased 0.7 per cent to $837,169. In Melbourne house prices increased 0.6 per cent to $986,992 while apartments increased 0.5 per cent to $626,449.

Property prices in regional areas increased 2.2 per cent, double the 1.1 per cent rate across the cities.

CoreLogic research director Tim Lawless said almost every factor driving housing values up had “lost some potency”.

“Fixed mortgage rates are rising, higher listings are taking some urgency away from buyers, affordability has become a more substantial barrier to entry and credit is less available,” Mr Lawless said.

Credit assessments were tightened at the start of the month following steps from the Australian Prudential Regulation Authority to stop risky borrowing. The average home buyer’s borrowing capacity fell 5 per cent as a result of the higher interest rate buffers lenders are required to use to assess them.

There has been a significant rise in auction activity and a softening clearance rate in recent weeks.

There has also been an overall surge in homes listed for sale, which Mr Lawless said was a significant factor slowing the market. There was a surge in new listings in November pushing the market to its highest level since 2015.

“We expect inventory levels will continue to normalise into 2022 which should see selling dynamics gradually shift away from vendors, providing buyers with some additional leverage at the negotiation table,” he said.

Sydney and Melbourne have also been affected by affordability pressures and the lack of interstate and overseas migration.

Melbourne had its most auctions on a weekend since mid-September last weekend, with a preliminary clearance rate of 68.5 per cent. Sydney had its second busiest weekend on record with a year-low clearance rate of 71.4 per cent.

Regional NSW property prices increased 2.4 per cent over the month, with regional Victorian prices up 1.8 per cent.

The strongest performing capital city was Brisbane, where house prices jumped 3.2 per cent to $757,194. Canberra house prices increased 0.8 per cent to $999,755.

Sydney house prices are up 29.1 per cent over the year, while Melbourne house prices are up 18.1 per cent. Regional NSW and Victorian house prices are up 34.2 per cent and 28.9 per cent respectively.

Regional areas within a commuting distance of a major city, as well as coastal and lifestyle areas, are seeing significant growth. This includes the NSW Southern Highlands and Shoalhaven, the Hunter Valley and the Tasmanian regions of Launceston and the North East.

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