A property analyst has pointed to the Albanese government’s controversial capital gains tax and negative gearing changes for the “very tough market”, but not all markets are “as bad” as others.
Speaking to News24 host Chris Kenny, Property Investment Professionals Australia’s Cate Bakos revealed Darwin and Hobart are the only two capital cities that have seen property prices increase.
“It’s been tough across the country, but we’ve had two capital cities this month that have had a little bit of a reprieve, that is Darwin and Hobart. But outside of that, we’ve had some really significant movement,” Ms Bakos said.
“Particularly in Sydney and Perth and Adelaide and Brisbane. They’ve really felt the brunt of that.
“We’ve had, in one month, price downturns in Sydney of 1.6 per cent and in Brisbane 2 per cent, Adelaide 1.2 per cent and in Perth 1.7 per cent. So it has been tough and it’s been very well felt.”
It comes as the Reserve Bank is expected to raise interest rates again on Tuesday, the fifth hike this year.
New research from Westpac found 68 per cent of Australians believe falling house prices would be good for the country, while 67 per cent remain concerned property values could drop even further.
However, according to the findings, 82 per cent of Australians said home ownership was still completely out of reach for the average person.
Ms Bakos said “things have levelled out a bit” in Melbourne, with other cities showing signs of “doing really well” but questioned how much further prices could drop.
“How far could it go? Well, we’ve got talks of a rate increase tomorrow. That’s certainly scared a few buyers,” she said.
“But it’s spring season, so we’ve got vendors who are particularly keen to make decisions now.
“So it’s a very tough market for vendors, but in some capital cities it’s not quite as bad as the media would have us believe.”
Ms Bakos said there had been “a lot” of investor activity in the lower and median quartiles, suggesting the Albanese government’s tax changes have played a “major part” in who is currently buying homes.
“We’ve seen some segments come off harder than others, and that has definitely been attributed to the tax changes,” Ms Bakos said.
“We had a lot of investor activity in the lower quartile and the median quartile, and they’re the areas that have really come off of late.”
Last Friday, Westpac chief executive of consumer banking Carolyn McCann said the findings reflected the competing pressures facing Australia’s housing market.
“Affordability remains a significant challenge for many Australians, and these findings suggest many view lower prices as part of the solution,” she said.
“But there is another side to that equation. For many Australians, their home can be their biggest financial asset, so concern about falling values is understandable.”
There have also been concerns that further rate rises could force more homeowners to sell, adding supply to an already weakening market.
Ms McCann said buying a property was a long-term commitment, despite the current uncertainty.
While current downturns may appeal to first home buyers, Westpac’s economists expect national property prices to rise by three per cent in 2027.