Value decline flattens for start of spring

Property market researchers are hopeful the property market is showing signs of marginal improvement despite another value drop in September.

CoreLogic’s Home Value Index recorded a 1.4 per-cent decline in the past month, following the 1.6 per cent slump in August that was the highest recorded in almost 40 years.

Regional Victoria fared slightly better than the national average and its regional counterparts in large states, as it fell just 1.1 per cent for the month.

House values for the region have declined 3.6 per cent since a peak in June, after surging by 41.6 per cent to reach the record-high mark.

CoreLogic research director Tim Lawless said ongoing concern from interest rate rises, which went up another 025 basis points to 2.60 per cent earlier this month, could continue affecting home values for coming seasons.

“It’s possible we have seen the initial shock of a rapid rise in interest rates pass through the market, and most borrowers and prospective home buyers have now ‘priced in’ further rate hikes,” Mr Lawless said.

“However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again.”

Meanwhile, predictions of an unusually slow start to spring also materialised in the September figures, though researchers said the sector could draw hope from slight increases in lead market indicators.

“Auction clearance rates also trended upwards, albeit subtly, in September, and consumer sentiment nudged a little higher as well on the back of strong labour market conditions,” Mr Lawless said.

“We’ve also seen the flow of fresh listings continue to slide through the first month of spring, which is uncommon for this time of the year.”