It has taken 17 months, but finally the prices of Australian property are beginning to show some weakness. RP data research indicates that prices across the country’s capital cities have dropped by about 0.7% for the first time since 2008.
Experts believe that significant property price downturn is unlikely despite references to an Australian Property Bubble by some overseas economists. Australia is different because of our housing shortage issues. Nevertheless people do react to economic conditions such as movements in interest rates as well as availability of finance.
In the three months to June, all capital cities with the exception of Adelaide have either maintained average prices or experienced minor drops.
ANZ economist David Cannington also said the result was expected given the market had undergone so many months of continuous growth.
Despite the drop in quarterly growth, in annual terms Australian house prices are still 10.5 per cent higher than what they were a year ago.
Reports by RP Data suggest that our property market is quite healthy with basic market fundamentals being in check.
There are no escalating rates of mortgage defaults nor repossessions to suggest that our market is in trouble.