Australian Housing Market Slumps as Rate Hikes Take Toll on Major Cities
The Australian housing market is continuing to decline, with home prices falling in major cities beyond Sydney and Melbourne. According to CoreLogic, July's dwelling prices fell 0.7% from the previous month, marking a three-year low.
The steepest drop was seen in Sydney, where prices fell 1.4%, followed by Melbourne at 1.2%. Brisbane and Adelaide saw smaller declines of 0.6% and 0.2%, respectively, while Perth, Hobart, and Darwin were the only cities to see price increases.
Experts point to the Reserve Bank of Australia's three benchmark rate hikes this year as a major contributor to the decline in home prices. Rising interest rates have increased mortgage loan payments and reduced the amount that new borrowers can obtain.
The Australian government's reduction of tax benefits for real estate investors in May has also dampened investment demand, while rising living costs and high household debt have reduced the number of people looking to buy dwellings.