Biggest home price slump in 12 years
CAPITAL city home prices have posted their biggest quarterly fall in at least 12 years, as more stock in the housing market allows prospective buyers to wait for bargains, a survey shows.
Capital city dwelling values fell by a seasonally adjusted 2.1 per cent in the first quarter of the year, according to the latest RP Data-Rismark Home Value Index.
The quarterly change was the steepest since the index series began in June 1999, RP Data research director Tim Lawless said.
Prices were flat in the month of March and down 0.6 per cent over the past 12 months, with the National City dwelling value median price at $455,000.
The numbers were being dragged down by a recent rapid build-up of housing stock into the market, he said.
"The amount of properties being advertised for sale is about 30 per cent higher than what it was last year," Mr Lawless told AAP.
With more dwellings available for sale, prospective buyers are negotiating for lower prices much more than they used to, he said.
"The simple fact that there's so much stock to choose from for prospective buyers is resulting in more negotiation in the markets (and) buyers are having to sell at lower than what their expectations were.
Seller were now selling properties about 6.5 per cent lower than the original asking price on average, compared with about 5.2 per cent the same time last year.
Recent extreme weather events, including the flooding in Queensland, may also be impacting on the lower numbers, Mr Lawless said.
"Also, you have the fact that interest rate speculation seems to be building, that they're going to be going up sooner rather than later, particularly with the CPI figures out just recently."
The survey found that while residential properties may not have seen any capital growth over the past 12 months, many are seeing robust increases in rental yields.
"In contrast to the fall in home values, gross rental yields have been improving with apartments and houses now delivering a gross return of 4.9 per cent and 4.2 per cent respectively in March 2011," Mr Lawless said.
The capital city average for property values were being pulled down considerably by the two weakest performers of Brisbane and Perth, down 4.6 per cent and 3.4 per cent respectively in the quarter to March, he said.
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