Every month CoreLogic releases its monthly home value index result. Corelogic has just released its April report, showing that national dwelling values went 0.1% lower during April 2018.
CoreLogic's figures showed that Sydney's house prices fell by 0.4% for the month. That means prices have fallen by 1.2% for the quarter and 3.4% over the past 12 months. However, it wasn't until around July when prices start falling, so the annual decline could seem much steeper in three months' time.
Melbourne's house prices also declined by 0.4% for the month. Its quarterly fall was a little less than Sydney's, coming in at a 0.7% decline. Melbourne has registered a 3.7% annual increase, but this is steadily falling with each negative month.
Brisbane, Adelaide and Perth were essentially flat for the month and the quarter. Perth's property declines have slowed in recent months, it is now only showing an annual decline of 2.3%.
Hobart continues to be the strong performer. Its market showed a 1.2% rise for the month, 3.6% for the quarter and an annual increase of 12.7%.
Darwin and Canberra both showed a monthly increase of 0.6%. Darwin's quarterly increase was 0.7% whilst Canberra's was 0.5%. However, Darwin's annual price change is negative 7.7% whilst Canberra's is a positive 2.6%.
CoreLogic's head of research, Tim Lawless said "At a macro level, the latest trends are virtually the opposite of what we have become used to over the past five or so years. Regional areas are now outperforming the capitals and units are outperforming houses. Also, the most expensive properties are now showing weaker conditions than the more affordable ones."
Foolish takeaway
This seems like quite the mixed bag. Considering Sydney and Melbourne's prices have the biggest impact on the Australian economy, I think this continued downward trend is worrying for property investors – however it's not a crashing market either.
There is a large amount of interest-only loans that are going to turn into interest & capital repayments over the next few years, which could force some people to sell and exacerbate the downward house price spiral.
I'm sure the economists at Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) will be keeping a close eye on these latest results with household debt at all-time highs.
