Australia home prices fall in March, pace of decline slows
SYDNEY, April 1 (Reuters) - Australian home prices fell
again in March as credit conditions remained tight and investors
stayed away, though the pace of decline slowed as more auctions
Monday's report from property consultant CoreLogic showed
home prices nationally fell 0.6 percent in March, from February
when they dropped 0.7 percent. That was the smallest monthly
fall since October. Values were down 6.9 percent on a year
The index has fallen in 15 of the past 17 months, wiping out
more than two years of gains. Values in the combined capital
cities fell 0.7 percent in March, after a 0.9 percent drop the
The slower pace of decline came as auction clearance rates
have picked up over the last month or so, particularly in the
hardest-hit markets of Sydney and Melbourne.
Prices fell 0.9 percent in Sydney in March, and 0.8 percent
Values nationally have fallen 7.4 percent from their peak in
October 2017, though they are still almost 16 percent higher
than five years ago.
Any improvement would be welcomed by the central bank, the
Reserve Bank of Australia (RBA), which is concerned that a
further substantial fall in prices would undermine household
wealth and spending.
Australia's housing stock is valued at A$6.8 trillion ($4.83
trillion), or almost four times the country's annual gross
Falling house prices are 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.
The conservative government announces its annual budget on
Tuesday and is likely to unveil a package of tax cuts and
spending plans to win over voters.
The RBA also holds its March policy meeting on Tuesday and
is considered almost certain to keep rates at 1.5 percent, where
they have been since mid-2016.
The weakness in home prices is a major reason financial
markets are wagering the central bank will have to cut
rates this year, possibly as soon as August.
Part of the drag on housing has come from banks which,
scalded by a spate of scandals, have toughened their lending
criteria and raised mortgage rates on many products,
particularly for investors.
(Reporting by Wayne Cole; Editing by Daniel Wallis)
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