Figures from property consultant CoreLogic on Wednesday showed prices nationally eased 0.1% in February from January, when values dropped 1.0%. That marked the smallest monthly fall since May last year when the Reserve Bank of Australia (RBA) started hiking interest rates.
Prices were still down 7.9% from a year earlier. In particular, prices in Sydney rose 0.3% in February from a month earlier, driven by a 0.7% rise in the top end market. Every other capital city except Hobart in Tasmania saw values fall by less than half a percent over the month. CoreLogic's research director Tim Lawless said the stabilisation in housing values over the month coincides with consistently low advertised supply levels and a rise in auction clearance rates.
"Considering the RBA's move to a more hawkish stance at the February board meeting, along with an expectation for a weaker economic performance and a loosening in labour markets, there is a good chance this reprieve in the housing downturn could be short-lived," said Lawless.
"We also have the fixed-rate cliff ahead of us; arguably the full impact of the aggressive rate hiking cycle is yet to play out." In Melbourne, price gains during the COVID pandemic have all but been erased, while prices in Sydney still were 7.7% higher than March 2020 levels.
Separate data from PropTrack also out on Wednesday showed home prices rose 0.2% in February from January, with every capital city aside from Hobart seeing prices rebound.
The RBA has lifted rates by a whopping 325 basis points to a 10-year high of 3.35% to curb red-hot inflation. In a hawkish tilt that surprised many, the RBA flagged at least two more rate hikes earlier this month, prompting investors to wager on further hikes towards a peak rate of 4.35%. (Reporting by Stella Qiu;)
