National home values stall in May for first time since 2025
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Australia’s housing market lost momentum in May, with national home values remaining largely unchanged as rising interest rates, weaker consumer confidence and proposed property tax reforms continue to affect buyer demand.
New data from Cotality showed Sydney and Melbourne recorded the biggest declines, with home values falling 0.9 per cent and 0.8 per cent respectively. Canberra also posted a small drop.
Cotality research director Tim Lawless said affordability pressures, higher borrowing costs and uncertainty around the economy were all weighing on the market.
Sales activity has also slowed, with fewer buyers entering the market compared with last year. Industry experts say many buyers are becoming more cautious amid concerns prices could fall further.
Despite the softer national trend, some cities continued to perform strongly. Perth and Darwin recorded the biggest monthly gains, while Brisbane, Adelaide and Hobart also posted modest growth.
Regional housing markets remained more resilient than capital cities, although growth has also started to slow.
Economists say Sydney remains vulnerable due to high property prices and affordability challenges, while Melbourne continues to face weak confidence and softer demand.
The Reserve Bank has lifted interest rates three times this year, pushing the cash rate to 4.35 per cent. Ongoing inflation pressures have also increased the possibility of another rate rise later this year.
Proposed changes to negative gearing and capital gains tax are also expected to reduce investor activity, with some forecasts predicting slower price growth and weaker market conditions over the next 12 months.
While analysts expect housing prices to soften further, most believe a major market crash remains unlikely unless unemployment rises sharply.
Real estate agents in Sydney are already reporting fewer buyers attending inspections and a more cautious market compared with last year.
Source : ABC News
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