Home prices in Sydney and Melbourne, two of Australia’s largest and most expensive markets, could fall into negative territory in May, as indicated by preliminary data Tuesday from information provider Corelogic.
During the first four weeks of this month, home prices in Sydney and Melbourne dropped 1.3% and 1.8%, respectively, over the past month. Last week, prices declined 0.1% and 0.5% in Sydney and Melbourne, following 0.4% and 1% in the prior week.
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While both cities will likely register a negative growth rate in May, when seasonal factors are taken into account, the end result could be more encouraging, according to Tim Lawless, head of research at CoreLogic.
Mr. Lawless cited a few factors for the price decline, including rising mortgage rates, weakening market confidence and slowing real estate investment activities.
The government has also rolled out a few market cooling measures from stamp duty to bank lending restrictions, mainly targeted at foreign buyers and speculative investment.
Buyers would be salivating for this #Sydney spot for location alone. It also happens to have an exquisite home https://t.co/2PD9wJfZC5 pic.twitter.com/CQFfCBh4b1
— Mansion Global (@MansionGlobal) May 21, 2017
In April, home prices in the two cities already showed signs of weakening, as Sydney’s residential values remained flat and Melbourne’s increased only 0.5%.
The final CoreLogic Hedonic Home Value Index for May is scheduled to be released in early June.