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Sydney Drives National Property Price Fall

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Sydney residential property prices fell 1.4 per cent in the September quarter 2017 following positive growth over the last five quarters, their biggest drop in nearly six years.

Sydney established house prices fell 1.3 per cent and "attached-dwellings" prices fell 1.4 per cent in the September quarter 2017, according to the latest figures by the Australian Bureau of Statistics.

It was the sharpest fall in prices in Sydney in two years.

For the weighted average of the eight capital cities, the index fell 0.2 per cent in the September quarter 2017. This was the first fall in the index since the March quarter 2016.

Falls in the residential property price index were also seen in Perth (-1.0 per cent), Darwin (-2.6 per cent) and Canberra (-0.2 per cent). These were offset by rises in Melbourne (+1.1 per cent), Brisbane (+0.7 per cent), Adelaide (+0.7 per cent) and Hobart (+3.4 per cent).

[Related reading: Interest-Only Lending Falls to Record Low: Report]

Market estimates according to JP Morgan were expecting to see an across the board rise of 0.5 per cent.

"Residential property prices have continued to moderate across most capital cities this quarter," chief economist for the ABS Bruce Hockman said.

The total value of Australia's 10 million residential dwellings increased $14.8 billion to $6.8 trillion. The mean price of dwellings in Australia fell by $1,200 over the quarter to $681,100.

[Related reading: October Building Approvals in Surprise Increase]

Last month, figures from the ABS showed a rise in approvals for construction of new homes of 0.9 per cent, defying analysts' expectations of a 1.0 per cent decline.

Housing construction activity has been buoyed by record low interest rates and strong population growth. Victoria was the standout state in the September quarter for dwelling approvals and construction.

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