Australia’s housing market is slowing down after several years of frenzied growth, December sales data indicate.
Prices in Sydney declined 0.9% month-over-month in December, dragging down annual appreciation to an anemic 3.1% when compared to the rapid market growth of 2015 and 2016, according to a report Friday by CoreLogic. By comparison, housing prices in Sydney grew at an astonishing annual rate of 17.1% just seven months ago.
Sydney’s average price now hovers around A$895,342 (US$703,944).
“Sydney’s housing market has become the most significant drag on the headline growth figures,” said Tim Lawless, head of research at CoreLogic, in the report. Nationally, prices declined 0.3% to an average A$548,817 (US$431,496), dragged down by capital cities.
In Melbourne, prices declined 0.2% to A$720,417 (US$566,413) in December. They are still 8.9% higher than a year ago, though.
The transition toward weaker housing market conditions has been gradual and will likely continue through 2018, Mr. Lawless said.
Much of the slowdown can be attributed to a softening at the highest end of the market, due to a hike in the stamp duty on non-resident purchases in 2017, Mansion Global previously reported.
“In 2017 we saw growth rates and transactional activity gradually lose steam, with national month-on-month capital gains slowing to 0% in October and November before turning negative in December,” Mr. Lawless said.
Nationally, values rose 4.2% in 2017, marking a slower pace than the two years prior. Prices rose 5.8% in 2016 and 9.2% in 2015.
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