Australian housing values fell for the fifth straight month, as the crackdown on interest-only lending continues to quell housing demand.
Corelogic said the 0.1 per cent decline in national dwelling values in February 2018 was more moderate than the 0.3 per cent declines recorded over each of the previous two months, however, it marked the first time national values had fallen for five consecutive months since March 2016.
CoreLogic found housing values — on a national basis — fell 0.8 per cent since peaking in September 2017.
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"This was fuelled by tighter credit policies, particularly focused on investment and interest-only lending, which reduced demand from that part of the market," said CoreLogic's head of research Tim Lawless.
Some of the key findings for the last quarter included Hobart housing values rising 3.2 per cent, making it the strongest market. Sydney was the weakest market, with housing values down 2.4 per cent last quarter.
Melbourne dipped by 0.4 per cent, Perth was down by 0.7 per cent, Darwin dropped 2.0 per cent, while Canberra and Brisbane fell by 0.2 and 0.1 per cent respectively. Adelaide recorded a slight gain of 0.1 per cent.
Darwin's rental yield was the highest at 5.9 per cent for the last quarter whilst Melbourne's 2.9 per cent rental yield was the lowest.
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“Overall the housing market has continued to see soft conditions resulting in some slippage in housing values. However, the rates of decline have flattened out over the second half of February,” Lawless said.
“The next couple of months should provide a much clearer picture as to whether the falls are set to continue, or if the market is in fact stabilising.
“Considering the tighter credit environment, the eventual prospect of higher interest rates and ongoing housing affordability constraints, we expect housing market conditions will remain sedate relative to previous years.
“The reversal in capital gains has been mild to date, a clear sign that macroprudential measures have removed the heat from the market in a very controlled manner.”