SYDNEY (Reuters) - Australia's home prices marked the first monthly decline in almost two years in December as high mortgage rates stretched affordability and more sellers emerged after a long run of gains.
Figures from property consultant CoreLogic, released on Thursday, showed prices across the nation dipped 0.1% in December from the prior month, while values in the major capitals fell 0.2%.
Sydney prices slipped by 0.6% in December, while Melbourne lost 0.7%. Brisbane, Perth and Adelaide all continued to enjoy monthly gains.
"Growth in housing values has been consistently weakening through the second half of the year, as affordability constraints weighed on buyer demand and advertised supply levels trended higher," said Tim Lawless, CoreLogic's research director.
Property values were still up 4.9% for 2024 as a whole, adding about A$38,000 to the median value of a home, which in Sydney now stands at A$1.2 million ($745,680.00).
The government statistician estimates the value of land and housing held by households rose by A$851 billion in the year to September, reaching a notional A$11.3 trillion.
The strength of the market over the past couple of years has surprised policy makers given interest rates had hit 12-year highs of 4.35% late in 2023.
The Reserve Bank of Australia (RBA) recently opened the door to a rate cut as early as February but markets expect only a modest easing to around 3.60% over 2025.
"It will take a lot more than three or four rate cuts to get interest rates back to the pre-pandemic decade average of 2.55%," noted Lawless.
"So we don't expect lower rates to be the catalyst for a renewed phase of strong value growth."
A Reuters poll in November forecast home prices to rise around 5% in both 2025 and 2026, due in part to strong population growth and a lack of new supply.
($1 = 1.6093 Australian dollars)