Sat, 20 Aug 2022

SYDNEY, Aug. 2 (Xinhua) -- New data from Australian property analyst firm, Corelogic, has revealed that house prices continued to slump across Australia, especially in larger capital cities.

The Monday report revealed that across the nation dwelling values fell by 1.3 percent, and was most pronounced in Sydney and Melbourne where values fell by 2.2 percent and 1.5 percent respectively.

The decline came after a historic surge in house prices throughout the pandemic, driven by extremely low interest rates and an increase in savings rates. At their peak house prices were up nearly 30 percent.

"The rate of growth in housing values was slowing well before interest rates started to rise, however, it's abundantly clear markets have weakened quite sharply since the first rate rise on May 5," said CoreLogic's Research Director for Asia-Pacific division Tim Lawless.

Australia's central bank, the Reserve Bank of Australia (RBA), has increased rates three times from May to 1.35 percent. On Tuesday they are scheduled to make another decision.

"Due to record high levels of debt, indebted households are more sensitive to higher interest rates, as well as the additional downside impact from very high inflation on balance sheets and sentiment," added Lawless.

Households, especially those that took out large mortgages during the pandemic, have become increasingly attuned to the RBA's moves.

Australia's largest retail bank, the Commonwealth Bank of Australia (CBA), released data on Monday that showed a 96 percent surge in traffic to their loan repayment calculator following the RBA's June monetary policy update.

Furthermore, they saw a 46 percent spike in customers looking to increase their repayments.

"They chose to increase their repayments following the Reserve Bank Board meeting so as to factor any higher repayments into their household budgets immediately," said Commonwealth Bank's Executive General Manager of Home Buying Michael Baumann.

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