Home prices in Australian capital cities have eased after strong gains during the first few months of the year.
Capital city home prices fell 0.5 per cent in April, following growth of 2.8 per cent over the first quarter this year, according to RP Data - Rismark's Home Value Index.
According to RP Data, this is the first fall in capital city home prices since December, but dwelling values were still 4.2 per cent higher than when prices bottomed last May after two years of weakness.
However, Tim Lawless, RP Data’s Research Director, says the fall in prices is unsurprising due to strong home price growth that is typically experienced in the first few months.
"When viewed in line with other metrics such as auction clearance rates, private treaty indicators and some improvement in housing finance demand, it is likely that the negative April result will be a blip along the path to recovery," he noted in the report.
"We weren’t expecting that the high rate of growth evidenced over the first three months of the year would be sustained into April. A more measured pace of growth is a much more realistic outcome for the Australian housing market, especially considering that the first quarter is typically the strongest for value growth."
Adelaide was the best performing capital with a growth of 2.8 per cent on home prices. However, RP Data warns that the size of this gain is not a sign of a durable surge in prices; rather it likely reflects instability in a relatively small market.
Home prices were also up in Darwin, with a 0.2 per cent rise.
The steepest monthly declines were a 3.1 per cent fall in Hobart and a 2.5 per cent slide in Perth.
Prices were more modestly down in Brisbane (0.7 per cent), Canberra (0.6 per cent), Melbourne (0.5 per cent) and Sydney (0.4 per cent).
Prices outside the capitals edged 0.1 per cent higher for the month and were also up by that amount over the past year.
How home prices moved in April