This year's real estate market has been the most diversified of all time, and this situation is expected to continue in 2019, according to Cameron Kusher, a CoreLogic analyst.
According to CoreLogic's Best of the Best report, the value of national housing fell 4.1% in the 12 months to November, the largest annual decline since December 2011.
As the year progresses, the rate of decline in value accelerates, especially in Sydney and Melbourne. These two largest cities, as well as Perth and Darwin, recorded a decline in home values ​​during the year. Meanwhile, the rest of the capital markets experienced an increase in housing values ​​over the same period.
The annual change in the value of dwellings up to November was less than the annual change from the previous year in all capitals, with the exception of Darwin, whose general weakness was evident throughout the market.
In the various capitals, annual variations in values ​​were recorded at -8.1% in Sydney (the largest annual decline since May 1983), -5.8% in Melbourne (the largest annual decline since March 2009) and -0.8% in Darwin. In contrast, annual values ​​were 0.3% higher in Brisbane, 1.4% in Adelaide, 4.2% in Perth, 9.3% in Hobart and 4% in Canberra.
CoreLogic also found that the slowdown in the real estate market was triggered by the credit crunch as the economy continued to grow and mortgage rates reached near-record levels. This situation differs from previous housing market crises, generally caused by an economic slowdown such as the last recession or the global financial crisis, or by rising mortgage rates.
In 2019, Kusher expects a similar condition. He added that the decline in values ​​would probably worsen under the leadership of Sydney and Melbourne. However, value growth is expected to decelerate or remain stable in most other regions of the country due to tighter credit conditions.
"To date, the Reserve Bank is not too concerned about declining housing values, mainly because it has been confined to Sydney and Melbourne and the values ​​of both cities have risen sharply. these last years. While this may be the case, if the housing market downturn has an impact on consumers' consumption, we could then witness a change in (tactical). If that happens, some of the temporary macroprudential measures could be relaxed in 2019, "he said.
Overall, CoreLogic expects housing values ​​to fall again in 2019, with Sydney and Melbourne recording the largest declines.
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