Home prices fall, again
Australian home prices have fallen for the second consecutive year as nervous consumers continue to sit on the sidelines of the housing market.
Home prices eased 0.4 per cent on average across Australia's eight capital cities during 2012, according to the monthly RP Data/Rismark Home Value index released on Wednesday.
Melbourne homeowners fared worst, with prices down 2.9 per cent on average over the year, while Brisbane and Adelaide prices were both down 0.8 per cent.
Darwin had the strongest housing market, with prices up 8.9 per cent, while Sydney prices rose 1.5 per cent and Perth prices climbed 0.8 per cent.
Home prices fell 0.3 per cent across capital cities during December.
RP Data senior research analyst Cameron Kusher said home prices had fallen for two consecutive years and were now 5.7 per cent lower than their historic highs of November 2010.
There was a bright spot in the data, however, with house prices up 1.8 per cent from their lowest point set in May 2012.
But Mr Kusher said recent interest rate cuts had not been enough to spur growth growth in the sector.
"It has become clear that adjustments to official interest rates by the Reserve Bank are not having the same impact on consumers as they have in the past," Mr Kusher said in a statement.
The Reserve Bank of Australia's cash rate, currently at 3.0 per cent, is 1.75 percentage points lower than its level at the start of November 2011.
Over the same period, standard mortgage rates have dropped an average of 1.35 percentage points.
Mr Kusher said that with consumers saving more and spending less, the housing market was likely to remain relatively subdued through 2013, though he did expect prices to rise over the year.
CommSec chief economist Craig James said property investors were still making money, with RP Data figures showing returns from the sector up four per cent over calendar 2012.
"While Aussies are cautious on going into debt, (the) population is still rising while home building has remained weak," Mr James said.
"So rents are still rising and so are investment returns on property."
Sydney remained the most expensive place to buy in 2012, with a median house price of $665,000, while Hobart was the cheapest, with a median house price of $325,000.
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