Australia's median house price in the combined eight capital cities has fallen for the first time since December 2012, according to the Real Estate Institute of Australia (REIA).
REIA president Neville Sanders said, "The weighted average, capital city median price decreased by 0.4% to $695,788 for detached houses and 0.7% to $543,468 for other dwellings."
Falling prices in Sydney and Melbourne dragged down the average, despite strong growth in Brisbane, Canberra and Hobart, while Perth and Darwin saw small increases.
Sydney had the biggest fall in median house prices, which is probably no surprise given the strong run the city has had over the past year or so.
Mr Sanders also noted that annual growth is still strong but lower than compared to the last couple of years. "Compared to the to the December quarter of 2014, the weighted average median house price increased by 7.4%, while it was 5.7% for other dwellings."
REIA is one source of median house prices, with the Australian Bureau of Statistics (ABS) also releasing median house price information on a quarterly basis. The last update from the ABS was for the September 2015 quarter, which showed that average prices across the 8 capital cities rose 2% compared to the June 2015 quarter, and 10.7% compared to September 2014. Sydney median house prices had risen 19.9% – more than double its closest competitor Melbourne with a rise of 9.9%.
Following action by the banking regulator and the big four banks Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) to limit investor lending late last year, investors have deserted the property market in droves, and owner-occupiers have only partially filled their gap.
Comments by both sides of government regarding potential changes to negative gearing and capital gains rules may also have scared some buyers off, not to mention low rental returns in many capital cities.
Mixed auction clearance results in Sydney, with inner suburbs still strong and outer suburbs weakening point to a slowdown in house prices, and perhaps the inevitable fall in house prices.
Anecdotal evidence suggests this is already in play with sellers forced to readjust their price expectations in many parts of Sydney.
Foolish takeaway
There's now a tonne of evidence suggesting housing price growth has slowed and is starting to fall.
