Well it’s official – our nation’s house prices have suffered their steepest drop since the global financial crisis.
Property prices fell 4.8 per cent last year, with Melbourne prices dropping even further at 7 per cent.
“This is the worst fall we’ve seen since the GFC, which was a short and sharp correction, down about 5 per cent from peak to trough,” CoreLogic’s head of research Tim Lawless told ABC News.
“We see the Australian market slip further into negative territory – a longer and steeper downturn.”
Tighter lending standards and less foreign buyers are considered to be the two main drivers here, although now APRA have lifted their restrictions on interest-only lending saying they have done their job.
Mr Lawless said the prospect of Labor policy on housing if they win the next election could put more downward pressure on prices.
“We’re heading towards a federal election where we could see some taxation policies being changed, which could have a further negative effect on the market,” he told ABC.
Mr Lawless is referring to Labor policy promises to abolish negative gearing tax breaks for new investors who want to buy existing properties if it wins the next election, and to halve the capital gains tax exemption.
In Melbourne, prices have dropped 7.2 per cent from their peak in November 2017, and property in our city is now worth around what is what in February of that year.