Home prices in big Australian cities are beginning to drop causing analysts to think that the Australian property market is cooling after years of elevated valuations.
According to Globe and Mail, Sydney is considered Australia's most expensive market but recently home prices have dropped by 1.4 per cent in the last month. Following the trend is Melbourne were prices fell by 3.5 percent, according to information from CoreLogic RP Data.
As a result sellers are forced to cut asking prices. This decline in house values also leads to lower clearance rates and lesser investors buying real estate. It could eventually become a buyer's market. Now that the global economy is experiencing slow progress, the abrupt reduction in demand in internationally open real-estate markets in major Australian city challenges the capacity to endure of other residential areas in other parts of the world such as Toronto and Vancouver
According to Globe and Mail, Hobart, Darwin and Canberra are seeing falling home prices. On the other hand, Adelaide, Brisbane and Perth showed slight price growths, 0.7 per cent, 0.6 per cent and 0.3 per cent respectively. However, the prices in Perth and Darwin dipped down more than 4 per cent over the past 12 months. It was reported that commodity price slump is the driving force behind the unattractive economic conditions that's negatively affected real estate in these areas.
Moreover, the real estate agents in the Sydney area have said that the demand from mainland China has plunged as home prices increased. However such observation is considered subjective according to the online site. However, this argument has reportedly urged some agents to persuade sellers to cut asking prices in the prior months
But one agent reportedly says that most of her clients are coming from China. Nava Rosenberg, who According to Globe and Mail has a real-estate partner of Chinese descent, says, "People have been asking about the bubble situation, but at the end of the day it still comes back to supply and demand. It keeps on going up. ... There's just not enough inventory out there."
