SYDNEY: Australia's housing rebound lost some steam approaching the year-end, with price gains slowing to the lowest in nine months as fresh worries about the interest rate outlook, a rise in listings and worsening affordability weighed.
Data from property consultancy CoreLogic released on Friday showed home prices nationally rose 0.6 per cent in November from October, the smallest monthly gain since they started to rebound in February.
Sydney prices, which have led the rebound this time, slipped into negative growth in the final week of November, while Melbourne prices fell 0.1 per cent for the month.
Nonetheless, prices still reached a record high last month, a sticking point for the Reserve Bank of Australia which had worried that the rapid revival in prices would boost household wealth and stoke spending power even as the central bank is trying to put a lid on consumption.
That is one reason that the RBA ended four months of steady policy and raised interest rates to a 12-year high of 4.35 per cent earlier this month. It also left the door open to further tightening if necessary.
"It is looking increasingly clear the housing market is moving through a new inflection point, with the rate of growth in home values becoming more diverse, but generally weakening," said Tim Lawless, research director at CoreLogoc.
"The rate hike has clearly taken some heat out of the market, but other factors like rising advertised stock levels, worsening affordability and persistently low consumer sentiment are also acting as a drag on value growth in some markets."
To be sure, selling activity usually slows as it approaches the year-end holidays, and is expected to pick up in February.
A report from ANZ and CoreLogic this week showed that homebuyers in Australia would need 10 years to save for a deposit and the portion of income required to service a new home loan has jumped to 46.2 per cent, up from 29 per cent in March 2020.
Data from PropTrack also out on Friday showed home prices rose 0.22 per cent in November to a record high, but the pace slowed from a 0.36 per cent gain the previous month. - Reuters