Wayne Cole

SYDNEY (Reuters – Australian home values are slowly returning to Earth as skyrocketing markets Sydney and Melbourne shed some heat. But there’s still plenty of growth in smaller cities and regional areas.

CoreLogic released Friday’s figures showing that prices across the capital cities increased by 0.3% between February and March. Sydney fell 0.2%, while Melbourne dropped 0.1%. Brisbane did better, with an increase of 2.1% and Adelaide rising 1.0%.

The shift towards country living and more space led to an increase in regional values of 1.7%. The March quarter saw regional prices rise 5.1%, compared with 1.5% in the cities.

Prices rose by 0.7% nationally in March. This is 18.2% more than the previous year.

CoreLogic research director Tim Lawless stated that virtually every major capital and region in the rest of the state has seen a peak at their trend rate growth sometime last year or earlier.

“The most severe slowdown was in Sydney where prices for housing are high and the market is very tight. Listed supply is rising, but sales activity has fallen over the past year.”

A house costs A$1.4 million, while a Sydney home is worth A$1.1 million. This price is well below the A$739,000 national median.

Market performance was strong in 2021. The notional value (or market) of Australia’s 10,8 million properties rose by A$2 Trillion to A$9.9 Trillion.

While the boom brought wealth to households and consumers, it also raised concerns about affordability. This will be a hot topic in Federal Elections due in May.

A boom in the amount of mortgage debt led to regulators tightening lending standards. This is enhancing the argument for an increase in interest rates at the Reserve Bank of Australia.

($1 = 1.3362 Australian dollars)