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Property prices are diving by double-digits in this Australian capital city

Residential real estate price data business CoreLogic has reported that Sydney and Melbourne property prices both lifted in June, with property prices across Australia’s five capital cities reported to have lifted 9.67% over the year to June 30, 2017.

For the month of June, Melbourne’s house and unit price growth outpaced the usual market leader of Sydney, as low interest rates and the greater borrowing capacity of buyers continues to support property prices on the eastern seaboard.

Elsewhere, Perth and Darwin both recorded falls in property prices for the 12 months to June 30, with apartment prices wilting 10.5% in Darwin over the period.

Property investors and even owner occupiers will now be asking themselves whether the probable bottom of the Reserve Bank’s rate cutting cycle means Darwin’s double-digit price falls could be repeated across the country as confidence and demand slumps.

New South Wales has recently doubled its foreign buyers tax from 4% to 8% of the value of the property purchased, with lenders also upping rates on an out-of-cycle basis to Australian investors and owner occupiers.

Elsewhere, property investors are probably being advised at seminars across the country that borrowing rates have bottomed and Australian cities are likely to see a lot of property come to market this spring.

That will be good news for investors in the likes of REA Group Limited (ASX: REA), and Fairfax Media Limited (ASX: FXJ) as the operator of property portal

Others like listed real estate agent Mcgrath Ltd (ASX: MEA) will also welcome a rush for the exits by property investors this spring.

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Motley Fool contributor Tom Richardson owns shares of REA Group Limited.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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