Australian house prices fall
11 March 2016 by News DeskThe recent housing boom Down Under is coming to an end as new figures show that Australian house prices are falling across the country.
Soaring property prices have been the dominant recent trend but now a major over-supply of property has seen Australian house prices fall.
In fact, a fall of 0.4% to $695,788 in the average cost of a house is following three years of consecutive growth.
“It’s been many years since we’ve seen Australian house prices fall,” says Darrell Todd, Founder of thinkingaustralia.
“A market readjustment has been predicted for some time and the latest figures suggest it’s now happening.”
According to the Real Estate Institute of Australia, strong growth in Hobart, Canberra and Brisbane and small increases in Darwin and Perth failed to offset falling average prices in Sydney and Melbourne. Adelaide recorded no change over the quarter.
Sydney, the strongest market, recorded the biggest fall in prices with average house values dropping by 2.5% in the quarter.
However, compared with the December 2014 quarter the average house price for all capital cities was up 7.4%. Every city saw price rises except Perth.
Average house prices in Australian capital cities*
- Australian average house price: $695,788
- Sydney: down 2.5% to $1,025,478
- Melbourne: down 0.1% to $718,000
- Hobart: up 9.8% to $392,000
- Canberra: up 3.7% to $593,000
- Brisbane: up 3.2% to $490,000
- Darwin: up 0.5% to $608,750
- Perth: up 0.4% to $535,000
- Adelaide: no change at $430,000
One reason for recent soaring property prices is the cost of land. In Melbourne developers paid $35,000 per block in 2007. Today the same land will cost three times more at $100,000.
“Land usually makes up 30% of the cost of a new house, so if land prices rise so do house prices,” says Darrell Todd.
In Sydney developer’s land costs range from $60,000 to $120,000 and likewise in Perth, while on average in Brisbane and Gold Coast blocks of land are $100,000.
Development land in Melbourne’s new growth suburbs cost around $200,000 – $220,000 whereas similar allotments in Sydney cost around $400,000 – $450,000.
For expert information on Australia property, including house prices, visit our Property section.
You can also visit our About Australia and Travel sections for more general information on visiting and living Down Under.
*Source: Real Estate Institute of Australia.
