A decline in property investment and foreign buyer activities still pose a threat to Australian housing markets. Reports say that these threats are expected to drive house price growth lower by 1 percent in the next two years.
Recently, Canberra was identified as one of the three Australian capital cities that have seen growth in home values. According to Domain, the latest Core Logic RP's monthly home value index show the home prices in Canberra rose by 2.8 percent in January, with median sales prices higher by $12,000. Following behind Canberra is Melbourne, in which property values are up by 2.5. Hobart took the lead with a recorded growth in property value by 4.7 percent in January. Sadly, the rest of the other capital either saw no movement or a drop in property values like Sydney's housing market.
According to ABC, the latest residential property survey conducted by the National Australia Bank shows that sentiment and expectations among participating real estate market is only +1, down from the +10 observed in Q3 of 2015. Sentiment was even worse in New South Wales and Queensland. The recent 3.1 percent drop in Sydney's home value as reported by the Domain House Price Report for the quarter ending December 2015. It was then reported that sudden decrease in the number of investors in Sydney was the reason for the decline.
On the other hand, even as Melbourne records a 1.8 percent home value growth by the end of 2015, the decline in foreign investments in Victoria was undeniable. Investments from overseas are down to 16.4 percent of all new property sales from 25.5 percent, while foreign investments on established homes sink to 8.6 percent from 15 percent. This could already be the result of the stricter policies on foreign investments that took effect in December.
Given these conditions, the Australian housing market may be cooling down.
