Median housing prices decline

Latest figures show that median prices for houses in the country decreased during the September quarter according to the Mortgage Choice Real Estate Market Facts report.

“Both house and other dwelling median prices declined by 0.5 percent to US$533,447 and US$424,499 respectively”, said Real Estate Institute of Australia President, David Airey.

With the exception of Sydney, Melbourne and Hobart, all Australian capital cities recorded median house price decreases over the quarter. Sydney, Melbourne and Darwin recorded the highest median house prices while the lowest were recorded in Hobart, Adelaide and Brisbane.

“The moderation in the property market is reflected in the a slowdown in the growth in the value of loans to purchase established dwellings, which increased 2.8 percent over the September quarter compared to an increase of 4.6 percent in the June quarter, “ said Airey. “Although the cash rate remained unchanged over the September quarter, housing affordability levels declined, putting upward pressure on household finances. This is not only affecting current house purchasers but also new buyers trying to enter the property market.”

Mortgage Choice data shows that the popularity of fixed rate home loans was on the rise during the September 2010 quarter. This more conservative loan type reached 3.7 percent of all new loan approvals in September for Mortgage Choice, Australia’s largest independently-owned mortgage broker. That more than doubled the following month to a 27-month high.

Kristy Sheppard, Senior Corporate Affairs Manager of Mortgage Choice said: “As rates on fixed term home loans started to rise, in mid September, auction clearance rates were stabilizing to more normal levels and talk about cash rate increases escalated. Buyer caution began creeping up even as the property market began turning to favor them.”