More evidence that Australian house prices continue to drift downwards.

According to the Australian Bureau of Statistics capital city house prices fell 1.2% in the September quarter.

This compared with a downwardly revised 0.5% fall in the house price index for the June quarter (originally a fall of 0.1%).

In the year to September, the index fell 2.2%, according to the ABS.

The capital city indexes fell in all capital cities, Melbourne (-1.7%), Brisbane (-2.5%), Perth (-1.3%), Sydney (-0.2%), Adelaide (-0.9%), Canberra (-2.0%), Hobart (-1.0%) and Darwin (-0.4%).

For the year to September, house prices fell in all capitals as well with Brisbane seeing a 5.2% fall, Darwin (-4.4%), Perth (-4.2%), Adelaide (-3.2%), Canberra (-2.2%), Melbourne (-2.1%), Sydney (-0.3%) and Hobart (-0.3%).

The ABS data follows a report on Monday which said that capital city home prices fell for the ninth straight month in September, with Sydney posting the sharpest drop.

Home prices fell 0.2% in September after falling a 0.4% in August, according to property research group RP Data-Rismark.

Home prices fell by 0.6% in Sydney and 0.3% in Melbourne, seasonally adjusted. Canberra home prices dropped 0.5% as well.

In Brisbane they rose 0.4%, while they eased 0.1% in Perth, according to RP Data said.

From their December 2010 peak, monthly home prices in Sydney have only fallen 1.7%, but in Melbourne, they are down 5.2% from their December 2010 peak and in Brisbane prices are down 7.7% from March 2010 peak.

And figures out yesterday from the Housing Industry Association showed that new house sales fell in September, reaching their lowest monthly level in more than a decade.

New homes sold in September dropped by 3.5%, following a 1.1% rise in September, according to the Housing Industry Association - Jeld Wen report.

Sales of new houses - excluding apartments and town houses - fell by 3.3% taking them to the lowest level since December 2000, with about 5000 houses changing hands.

Sales of new apartments and town houses dropped 5.5%.

"The September figures highlight the present soft conditions facing new home building and reinforce the importance that the RBA Board calls it right today by cutting interest rates," said HIA acting chief economist Andrew Harvey.

The HIA said that while house sales rose by 5.7% in September in Queensland, where the state continues to bounce back from the January flooding, they fell in the other capital cities.

In Victoria new house sales dropped the most, or 6.6%.

Copyright Australasian Investment Review.
AIR publishes a weekly magazine. Subscriptions are free at www.aireview.com.au