Australia’s housing sector is continuing to struggle, with further falls in home prices and sales of new dwellings close to the lowest level in a decade.
Capital city home prices fell by four per cent in the year to October, after a 0.5 per cent decline in the month.
Brisbane led the national decline, with average home prices falling eight per cent over the 12 months to October, a report released by RP Data on Wednesday showed.
Home values in Melbourne, Adelaide and Perth all declined five per cent or more over the same period, while Sydney remained relatively steady, with prices dropping by 1.1 per cent.
At the same time, regional home prices fell by 3.4 per cent.
RP Data Director of research Tim Lawless said home buyers could benefit from the weaker market.
“The combination of lower interest rates, cheaper homes and rising incomes is generating a welcome boost to housing affordability, particularly in those markets where value falls have been more significant,” he said in a statement.
All capital city home prices fell for the month of October, except Sydney, which was unchanged, and Canberra and Hobart, which added 1.6 per cent and 3.1 per cent, respectively.
Meanwhile, sales of new homes across Australia increased slightly in October, after falling to their lowest level in a decade during September.
New home sales rose a seasonally adjusted 5.5 per cent to 7,611 units in October, following a 3.5 per cent fall in September, the Housing Industry Association (HIA) said in a statement.
HIA Chief Economist Harley Dale welcomed the increase in new home sales, but said the volume of detached home sales was 29 per cent below the average for the last 15 years.
Private house sales increased 5.1 per cent in October to 733 units.
Purchases of multi-unit dwellings increased by nine per cent.
“As it stands, the profile for new home sales remains very weak, despite this latest monthly increase,” Mr Dale said.
A decision by the Reserve Bank of Australia (RBA), which meets next week, to cut interest rates could provide much needed support for the market.
“There is a compelling case for another, larger interest rate cut next week, while any logic behind achieving a swift return to budget surplus in 2012/13 is spurious, given current global economic conditions,” he said.
