Australian house prices fell by almost 4 per cent during the year to the end of March, but prices improved slightly during the last quarter.
Average prices for residential homes were down 3.7 per cent on 12 months to March 31, but rose by 0.1 per cent in the March quarter, Australian Property Monitors (APM) has revealed.
Units values increased by an average 0.5 per cent during the first quarter of 2009, but were two per cent lower than a year ago, APM said.
Lower interest rates and a boost for first home buyers helped lift residential property values during the first quarter of 2009, the research found.
“While some capitals recorded quarterly falls in house prices, these are not at the level we saw last September when rising interest rates hit their peak,” APM economist Matthew Bell said.
Mr Bell said residential property prices were likely to stabilise in the second half of 2009 and early 2010 as low interest rates and a shortage of housing outweighed the risk from rising unemployment and a wilting economy.
Between September and February, the Reserve Bank of Australia (RBA) cut the cash rate by four percentage points to 3.25 per cent in a bid to stave off a recession.
The RBA in April lowered the cash rate by another quarter of a percentage point to three per cent, a 49-year low.
In mid-October, the federal government doubled the first home owners grant to $14,000 and tripled it to $21,000 for a newly built home. APM said the top end of the housing market was weaker in the March quarter, whereas the under-$500,000 sector was boosted by first home buyers.
“The combination of the introduction of the first home owners boost last October and the dramatic reduction in mortgage rates from their peak of nearly 10 per cent in August, to around five per cent in March, has improved affordability for many Australians looking to purchase their first property,” Mr Bell said.
Unit and house unit prices had the strongest rise in Darwin during the March quarter, up 9.3 per cent and 1.5 per cent respectively.
Over the year, units values in Darwin rose 18.8 per cent and houses were up 6.3 per cent. House prices in Adelaide had the biggest fall in the quarter, at 1.7 per cent, and were down 2.2 per cent from 12 months before.
Sydney had a mixed March quarter, with house prices down 0.2 per cent while unit values rose 0.9 per cent.
House prices fell 4.1 per cent in the year to March 31 in Sydney and unit values declined 1.2 per cent.
Melbourne\’s market was firmer in the March quarter, with house prices 1.6 per cent higher while units were up 0.5 per cent. Over the year, Melbourne\’s house prices were down 0.4 per cent and units were 1.2 per cent lower.