House prices have seen the largest fall since December 2011, according to new data from industry body the Real Estate Institute of Australia.
House price falls across the nation are at their highest level in seven years, according to the Real Estate Institute of Australia (REIA).
The industry body's Real Estate Market Facts for the September quarter shows weighted average median house prices fell 1.6 per cent - the biggest drop since December 2011.
Other dwellings fell 0.8 per cent, the largest drop seen in over a year.
The weighted average median house price for the eight capital cities fell to $751,411 over the quarter. House prices dropped in all the capital cities except for Brisbane and Adelaide, while prices remained stable in Melbourne.
Hobart had the largest fall in house prices, with the current median sitting at $475,000.
CoreLogic's November Hedonic Home Value Index results also show housing values are falling, led by Sydney where the drop was double the national average.
Source: CoreLogic
CoreLogic's Head of Research Tim Lawless said the downward pressure on values is mostly confined to Sydney and Melbourne thanks to the tightening in finance conditions.
“Additionally, housing affordability constraints are more pronounced in these markets and rental yields are substantially lower, indicating an imbalance between rental values and dwelling values.
"The ramp up in housing supply has been more pronounced in these markets against a backdrop of slowing demand, and Sydney and Melbourne have also been more affected by the reduction in foreign buying activity.”
Meanwhile, the rental market remained fairly steady across the board.
“Over the quarter, the median rent for three-bedroom houses increased in Melbourne and Hobart, remained steady in Sydney, Brisbane, Adelaide, Perth and Canberra.
"Darwin was the only capital where the median rent for three- bedroom houses declined," Mr Gunning said.
The median rent for two-bedroom other dwellings increased in Melbourne, Brisbane and Adelaide, remained steady in Sydney, Perth and Canberra and, decreased in Hobart and Darwin.
Melbourne had the largest increase while Hobart had the largest fall.
Pictured: Hobart had the largest fall in median rent. Image by Aaron Crick via WikiCommons.
Mr Gunning told WILLIAMS MEDIA the average vacancy rates show the rental market is easing.
“The weighted average vacancy rate for the eight capital cities increased to 2.6 per cent during the September quarter, indicating a slight easing of the rental market.
“The markets of Sydney, Melbourne, Brisbane, Canberra and Hobart have vacancy rates below the 3.0 per cent benchmark indicating a strong demand for rental accommodation in these capital cities.
“Reflecting the squeeze on loan approvals, over the past 12 months, loan numbers have decreased by 11.9 per cent across the country with loans to first home buyers decreasing by 3.7 per cent," Mr Gunning said.
The size of loans has also dropped, with the average loan across the country falling 1.8 per cent - the biggest quarterly decrease since March 2017.
“Loans to first home owners are also reducing in size. Up until a year ago, the average loan to those entering the market was above 90 per cent of the rate of non-first home buyers. Since June 2017, this rate has decreased to 80 to 85 per cent," Mr Gunning added.
The figures come after the industry body yesterday warned that housing finance figures are on a "slippery slope".
The October housing finance figures released by the Australian Bureau of Statistics (ABS) showed the number of owner-occupied finance commitments fell 0.1 per cent, marking the thirteenth consecutive month of decreases.
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