The September CoreLogic home value index has been released today and it showed that national dwelling values dropped by 0.5% during the past month.
National dwelling values have fallen by 2.7% over the past year.
Sydney has continued to fall, with September's change showing a drop in price of 0.6%. Sydney is down 1.5% for the quarter and down 6.1% over the past year.
Melbourne was the worst-performing city in September, it fell by 0.9% in the month and it's down 2.4% over the past three months. Over the past year it's down 3.4%, although Melbourne started its decline after Sydney.
However, other cities managed to post growth. Brisbane prices grew by 0.2% for the month, the Hobart price increased by an impressive 0.4% and Canberra prices went up 0.3%.
Rounding out the other cities, Perth went down by 0.6%, Darwin declined by 0.4% and Adelaide decreased by 0.2%.
Regional locations continue to outperform capital cities. The combined capital city price declined by 0.6% in September, but the combined regional price decreased by only 0.2%. Over the past 12 months the combined capital index showed a decline of 3.7% whilst the combined regional price went up 1.2%.
Corelogic's head of research, Tim Lawless, said "While the housing market downturn is well entrenched across Darwin and Perth where dwelling values remain 22.1% and 13.2% lower relative to their 2014 peak, Sydney and Melbourne are now the primary drag on the national housing market performance."
However, Corelogic did point out that the national price decline of 2.7% over the past year is hardly a crash and it is slower than the 2010 to 2012 period of decline.
The Royal Commission's inspection of the banks appears to be having an effect on the market. Would-be borrowers are finding it harder to get approval for loans, they could face tougher verification of expenses and may not be able to get re-financing from Commonwealth Bank of Australia(ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ).
Foolish takeaway
We aren't many months away from some of the more optimistic overall declines of 10% predicted by some in the media. However, no official recommendations have even come from the Royal Commission yet and interest rates are likely to keep rising due to the US Fed. We could be in for another year or two of declines.
At the moment it seems like a 15% overall fall is more likely than 10% considering the amount of interest-only loans that are due to turn into higher repayments over the next two to three years.
