In the past, Australian home prices have been weak and they are continuing this trend in the present, too. The Australian capital city home prices fell for the second consecutive year and the home builder companies seem to have sector specific problems due to this issue.

Real estate analysts, RP Data and Rismark, said that they recorded a fall of 0.3 percent in the previous month of the last fiscal year. This is well below the 0.4 percent mark which the analysts have recorded a year ago.

Cameron Kusher, RP Data spokesman, said, “Capital city home values remain 5.7 per cent lower than their historic highs of November 2010, however, dwelling values are up 1.8 per cent from their low of late May 2012. It is important to note that despite the fact that standard variable mortgage rates have fallen by an average of 85 basis points over the past year and by 135 basis points since October of last year, the housing market has still been unable to record growth in values over the year.”

This analyst feels that the home prices started showing signs of turn around in the second part of the past financial year. This has helped some of the investors to feel a bit safe as they say that these home prices seem to keep up pace with the Australian economy. The analyst also feels that housing bubble is long gone and those prices will never return to the Australian economy as well as the world economy.

He also added, “Home values remain below their historic highs across each capital city and have increased at an average annual rate of just 1.9 per cent over the past five years. It is clear that the previous strong value growth conditions to which many home owners became accustomed of recent years are well and truly behind us.”

Most of the house builders are finding some problems with these slow down in home prices as their revenue will get a knock if these prices behave in this way in the next year. Many analysts are turning cautious on this sector and they say that the home prices are seeing a turn around but that will not be helping the home builders to generate god revenues.

The manufacturing data has come out in the morning hours and that too, showed signs of slow down. So, all together, the data coming out of Australia seems to be a little bad. Surprisingly, the markets are not reacting to this. The ASX was up by around a percent, last time we checked.

In Australia, Harbour city remains as the top expensive city in home prices and it has been in the top spot for most of the year. Sydney’s home prices are also in a rising trend and the prices rose at an average pace of 1.5 percent in the last fiscal year. On the cheaper side, Hobart city is once again on the top list. This city has been the nation’s most cheapest city for over many months since now.

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Category: Finances
Keywords: Dow Jones, Manufacturing Data, Fiscal cliff