Adelaide house values slide

ADELAIDE’S housing values took a tumble last month.
The trend is evident across the nation with capital city dwelling values down by 1.2 per cent, RP Data-Rismark’s combined capital city index shows.
The Adelaide home unit market was worse; down 3.6 per cent for the month and -6.8 per cent for the last year.
RP Data national research director Tim Lawless said today the weak May result comes on the back of a substantial fall in consumer confidence over both April and May which can partly be attributed to a growing level of uncertainty about domestic economic conditions and possibly a sour reaction by consumers to the Federal Budget announcements in mid-May.
“The RP Data-Rismark daily index tracked higher from late April through to the 10th of May, and then went into a consistent decline over the remainder of the month,” Lawless said in today’s published report.
“How much of this downwards pressure can be attributed to the lower confidence reading is anyone’s guess, but the correlation of housing market conditions with consumer confidence is a strong one.
“If we see confidence levels remain in the doldrums, there is likely to be a similar dampening effect on the housing market.”
The fall in dwelling values over the month of May and for the quarter was broad-based with all capital cities apart from Perth and Hobart recording a fall in values over the month, and with half of the capital cities recording a fall in values over the quarter.
Adelaide’s house values fell 2.3 for the month to a median housing figure of $380,000 – down 1.6 per cent for the year ending 31 May.
Adelaide is the only city to have recorded a year-on-year decline.
In his accompanying analysis of the results, Lawless said the lower dwelling values represented vendors now offering up lower discounts from original asking prices in order to make a sale.
Rismark’s CEO, Ben Skilbeck said transaction volumes pointed to such a trend.
“In the absence of looking at house price indices to work out which market mechanism may be at play, two good metrics to examine are consumer confidence and housing finance credit growth.
‘If credit growth is anaemic and consumer confidence is weak, both of which is currently the case, it’s a good indication that strength in auction clearance rates, and other associated metrics, may largely be driven by vendors reducing their initial expectations in order to meet buyer offers.
“Given the weak housing markets of 2011 and 2012 were followed by a very robust 2013 first quarter, we may well be seeing some natural market volatility associated with vendors acquiescing and taking the opportunity to sell.
“It will be interesting to see which way the market trend develops in the coming month or two, especially given the historically low interest rate settings.”