Australia’s house prices see steepest drop in four decades

• Rapidly rising interest rates are also expected to drive further falls going forward.

KUALA LUMPUR (Sept 1): Home prices Down Under have seen “their largest monthly decline in almost four decades in August”, according to a report by Bloomberg today.

The “rapidly rising interest rates” are also expected to drive further falls going forward.

The news wire reported that according to CoreLogic Inc, prices in Sydney fell 2.3%, Melbourne “dropped” 1.2%, while Brisbane fell 1.8%.

The national index “which includes regional markets, also dropped 1.6% in its worst monthly result since 1983”, revealed the same report.

“It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” said Tim Lawless, research director at CoreLogic, told Bloomberg.

The Reserve Bank of Australia initiated a “tightening cycle” in May and has since taken “the cash rate to 1.85%”.

The rate is “widely expected” to rise again next week, “with money markets implying a rate of 3.3% by December”, said the report.