January data for Sydney and Melbourne house price revealed continuation of the fall in prices (as per figures provided from CoreLogic). Particularly, there has been a 0.9 per cent fall in Sydney while Melbourne house prices were still slightly better off with just a 0.2 per cent fall. The Sydney scenario now contrasts with the highest level witnessed in July 2017. All in all, Sydney’s annual price growth to the end of January was about 1.3 per cent while Melbourne’s annual return was 8 per cent. It is being reasoned out that tighter rules on investment lending are leading to the downswing in house prices in Sydney. Leaving the capital cities aside, growth seems to be picking up in regional markets.
In conjunction to these falls, volatility in high-rise construction was witnessed. Particularly, Australian Bureau of Statistics (ABS) revealed lower than expected new building approvals. Dwelling approvals plunged by 20 per cent in December in seasonally adjusted terms, owing to fall in private dwellings excluding houses. In trend terms, number of dwellings approved fell 1.7 per cent in December 2017, continuing the fall for three months, while approvals for private sector houses fell 0.2 per cent in December.
Dwelling approvals decreased in December in the Australian Capital Territory (35.0 per cent), the Northern Territory (12.9 per cent), New South Wales (5.6 per cent), South Australia (2.4 per cent), Western Australia (1.3 per cent) and Queensland (0.8 per cent), as opposed to Tasmania and Victoria that witnessed a rise of 3.1 per cent and 2.5 per cent, respectively, in trend terms.
Dwelling units approved and Private Sector Houses Approved (Source: ABS)
The dwelling approvals seem to be trending in contrast to what was seen in October and November last year.
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