Australia Housing Market Shows Cooling Prices and Lower Buyer Demand

First-home buyer loan applications declined in May and June compared with the same months last year. Credit agency data showed a 13.4 percent drop in first-timer applications in May, while a mortgage brokerage recorded a 20 percent fall in June.

Property prices outside government deposit-scheme caps began falling in April. Homes within the caps continued rising longer but started declining in June. Higher-value homes in Sydney, Melbourne and Canberra recorded larger drops, with Sydney’s top quartile falling about $90,000 over three months.

Investor lending fell by a fifth after the federal budget restricted negative gearing on existing homes. Banks reduced investor borrowing capacity by about 20 percent. Investor applications for new homes rose 31 percent year-over-year at one brokerage.

Fewer than half of homes listed for auction sold each week after late May. About 40 percent of homes sold before auction and nearly 20 percent of scheduled auctions were withdrawn. Total home sales in capital cities fell 16.2 percent in the three months to June compared with the prior year.