Luxury property price falls dragging down oz real estate market

The price of luxury properties in Australia could fall for up to three years with some having seen drops of 20% since January as expensive suburbs become the poorest real estate market performers.

The near double interest rate rise in November last year has hit Australian capital city property values which are down 1.2% in the three months to the of end April, although in raw terms home values are mostly unchanged at -0.2%, according to the latest RP Data-rismark index.

The difference between these two results reflects the fact that the housing market typically experiences higher rates of capital growth at the start of each year, which are reflected in the seasonally adjusted data.

According to Tim Lawless, RP Data’s research director, expensive suburbs have helped drag the overall market down. Over the year to the end of April, properties in the most expensive capital city suburbs recorded a 5.4% loss. In contrast, property values in the middle suburbs were down by only 0.9% while those in the cheapest suburbs were the best performers, hardly moving at -0.5 per cent.

Source: PropertyCommunity.com