Australian home prices fall in February, slide slows a little
SYDNEY, March 1 (Reuters) - Australian home prices continued
their long slide in February as credit conditions stayed
painfully tight, though the pace of decline did slow a little as
more auctions found buyers.
Friday's report from property consultant CoreLogic showed
home prices nationally fell 0.7 percent in February, from
January when they dropped 1 percent. Values were down 6.3
percent on a year earlier.
The index has fallen in 14 of the past 16 months, wiping out
more than two years of gains. Values in the combined capital
cities fell 0.9 percent in February, after a 1.2 percent dive
the previous month.
The slower pace of decline came as auction clearance rates
have picked up in the last couple of weeks, particularly in the
hardest-hit markets of Sydney and Melbourne.
While prices fell 1 percent in both cities in February, that
was again an improvement on January's steep drops.
"The results marked a subtle improvement in the rate of
decline, however the housing market downturn is now more
widespread geographically and we aren't seeing any indicators
pointing to a bottoming out just yet," said Tim Lawless, head of
research at CoreLogic.
Any improvement would be welcomed by the central bank, the
Reserve Bank of Australia (RBA), which is concerned that a
further steep drop in prices could undermine household wealth
Australia's housing stock is valued at A$6.8 trillion
($4.83 trillion), or almost four times the country's annual
gross domestic product.
It is also a headache for the Liberal National government of
Prime Minister Scott Morrison, which faces an election in May
and is trailing badly in opinion polls.
Just this month, the RBA said the risk from housing could
mean the next move in interest rates might be down instead of
up. Rates have been held at a record low of 1.5 percent since
mid-2016 and the bank had argued the next move would be upward.
The RBA holds its March policy meeting next week, just a day
before figures are forecast to show the economy grew sluggishly
in the fourth quarter of last year.
Part of the drag on housing has come from banks which,
scalded by a spate of scandals, have toughened their lending
criteria and lifted mortgage rates on many products,
particularly for investors.
The impact has been evident. Data out on Thursday showed the
amount of outstanding home loans rose at the slowest monthly
pace in more than four years in January, while the annual pace
was the weakest since 1984.
Yet home loans are easily the biggest business for the major
banks and there are signs of an easing in stance.
Australia and New Zealand Banking Group Ltd this
month said it may have been "overly conservative" on mortgages
and pledged to lend more to investors.
($1 = 1.4092 Australian dollars)
(Reporting by Wayne Cole, Editing by Rosalba O'Brien)
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