The property downturn in Australia is deepening and becoming the worst in recent history.
In the December quarter property values fell a whopping $133.1 billion in Australia with prices falling 2.4 per cent on average.
Prices fell the most in Sydney and Melbourne, while Adelaide and Hobart were the only capital cities to record a rise in prices.
BIS Oxford Economics senior manager Angie Zigomanis spoke to the ABC about the quarterly figures.
“Investors were a key driver of price growth through their upturns and the fall in investor demand is now underpinning the decline in prices,” he said.
“The weakness in prices and likely concerns about further falls will continue to play on purchaser sentiment through 2019, with further price falls in Sydney and Melbourne expected.”
Melbourne’s worst property downturn on record was the 25 per cent drop between 1976 and 1983, but this current slump is the fastest ever recorded in the city.
“So far, the period of decline in these two markets has been much shorter than the longest downturn duration and around half of their respective average downturn lengths in both the house and unit markets,” Mr Zigomanis told ABC.
According to Mr Zigomanis, the Australian Bureau of Statistics figures suggest the downturn in Sydney and Melbourne had spread to other cities.
“It’s been a mixed bag across the other markets, although with the 1.1 per cent decline in the Brisbane index in the quarter also concerning given that prices have been flat for most of the year, there is a danger that prices could fall further,” he said.
“The modest growth in the index in Hobart in the December 2018 quarter and fall in Canberra suggests that the rise in these markets is now running its course, with price growth to potentially flatten out over 2019.”