Price growth across the national property market has ground to a halt, with steep falls in Melbourne and Sydney as higher interest rates, stretched affordability and the federal government’s overhaul of tax incentives combine to suppress values.
Figures from property data firm Cotality published today show that through May, during which the Reserve Bank pushed official interest rates to 4.35 per cent and Treasurer Jim Chalmers outlined changes to negative gearing and capital gains tax, capital city property values were static.
But in Sydney, overall values fell by 0.9 per cent to be down by 2.1 per cent over the past three months. The drop was driven by houses, with values falling 1.1 per cent to be down 2.5 per cent since the start of the year. The median value of a Sydney house went through the $1.6 million mark in February. It has now subsided to $1.58 million.
In Melbourne, total dwelling values slipped another 0.8 per cent to be down by 2.3 per cent for the quarter. Again, the value of houses dipped further, down 1 per cent to a median of $958,000 compared with a 0.4 per cent drop in the value of units.
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