Australian home prices fell 0.2% in September, the sixth monthly decline in a row, as higher borrowing costs and a subdued spring selling season weighed on buyer demand, according to the realestate.com.au Home Price Report.
National prices now sit 3.3% below their March peak, and annual growth has slowed to just 0.1%, based on the PropTrack Home Price Index.
"Higher interest rates are weighing on borrowing capacity and buyer demand," said Eleanor Creagh (pictured), senior economist and author of the realestate.com.au Home Price Report.
Tighter budgets are pushing purchasers toward cheaper stock. House prices fell 0.3% in September and are 0.4% lower than a year earlier, while unit prices held flat and remain 1.8% higher over the year.
Regional markets likewise held flat for the month and are up 5.1% annually, in contrast to a 1.6% decline across the capitals.
Capital cities are carrying the downturn. Combined capital city prices fell 0.3% over the month, leaving them 4.3% below their peak.
The fastest falls are now in markets that led the last upswing. Adelaide posted the biggest monthly fall among the capitals at 0.6%. Over the past three months, prices there have dropped at an annualised pace of 8.6%, ahead of Brisbane at 7.9% and Perth at 7.4%.
Creagh said spring has failed to deliver its usual lift. Auction results remain weak, properties are sitting on the market for longer, and fewer homes are changing hands than a year ago, suggesting buyers and sellers are drifting further apart on price.
Separate figures point the same way. Cotality data cited in Herron Todd White's September Month in Review shows the median time on market stretched from 28 to 39 days over the three months to August, while the median vendor discount widened from 3.3% to 4%.
Creagh expects further price falls as this week's rate rise, tax changes, and the cumulative impact of higher repayments flow through.
She expects a strong jobs market, owners' equity, and few distressed sales to cushion the fall.
"Reduced buyer purchasing power remains the dominant pressure on prices," she said.
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