Australia's housing market is in a downturn for the first time in almost two years, after the average national price of a property dipped slightly in December. The data - from CoreLogic - shows the median value of property sold in the last month of 20-24 was just shy of $815,000, after a price drop of 0.1 per cent.
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00:00I think we can over-interpret this. A 0.1% decline over one month, as you say, in December
00:08is not a meaningful change in the market overall. I think we need to look at the 12-month figures
00:13or more usefully, actually, much longer term. Over the last 12 months there's been an increase
00:17across the country. Over the last five years, very, very large increases across the country.
00:21So flattening out in the last month of this year probably doesn't mean that much.
00:28Yeah, I was going to ask, I guess, whether we can put that 0.1% into perspective for us.
00:35How significant is it really?
00:38Well, no, it's really just flattening off of the market over the festive season this year.
00:44I think we need to be very cautious. We have seen a general trend for the increases in house prices
00:50to slow down over the last 12 months. So we're heading towards the point where things are
00:55starting to level off, particularly in the two largest cities in Melbourne and Sydney.
00:59We're still seeing very strong growth in Adelaide, Brisbane, Perth. So, you know,
01:03there's a way to go yet in those cities, but we are seeing some slowing of price growth.
01:09So given vacancy rates are extremely tight at the moment, is there any likelihood that this
01:15sort of levelling off or slowing down, as you say, will lead to fewer increases in rental prices?
01:21No, look, if we had plentiful rental supply, then we'd start to see landlords starting to
01:26think about, well, they can reduce their rent ask because, you know, their prices have gone down a
01:31bit. But really, while we have so much competition for every property, we're not going to see a
01:37price drop as a result. So this won't really help rent as much at all.
01:41Looking forward to later on this year, if the Reserve Bank does reduce interest rates,
01:47what impact would that have on the rental market?
01:50Well, I'm not keen to guess what the Reserve Bank's going to do. A lot of people have tried
01:55that and come off the wrong way. So I don't know what decisions they're going to make each time
02:01over the course of 2025. But if they do reduce interest rates, those landlords who have a
02:06mortgage on their property will have a bit less pressure. So that might in the long term help
02:13renters or at least reduce the pressure, the upward pressure on rents that we're currently
02:17seeing. But without a great increase in rental supply, we're not going to see a lot of change
02:22for renters.