Snap, Crackle, POP!!
That noise you are hearing may very well be the air leaking out of the Australian housing bubble. One point does not a trend make, but this piece of news out of the Business Spectator lends some support to our concerns for Oz. Consider the following, as reported:
After 17 consecutive months of solid growth, dwelling values across Australia’s capital cities recorded their first monthly decline of 0.7 per cent in June, according to the RP Data-Rismark Hedonic Home Value Index. This was the largest monthly fall in home values since April 2008. The June outcome follows on from a clear trend in the decline in monthly seasonally-adjusted growth rates in Australia’s capital cities, RP Data said. This represents a striking deceleration in the quarterly rate of increase in home values.
According to RP Data, dwellings in Sydney (+0.5%), Melbourne (+0.2%), Brisbane (-1.3%), Perth (-2.5%), Darwin (-0.1%) and Canberra (-0.8%) all experienced a marked reduction in growth rates in the June quarter from the 3 per cent per quarter pace witnessed since the beginning of 2009.
We’d remind our readers that the Case Shiller Home Price Index experienced its first monthly decline in August 2006 just as the year-over-year change in home prices began to slow dramatically, turning negative in January 2007. No need to remind home-owners what transpired from that point forward. With variable mortgage rates at a steep 7.4% in Australia, and a median home price of $465,000 in the nation’s capital cities, our hearts go out to the first-time home buyers of Oz. They’ll need a lot more than the lion’s courage to make that leap of faith.