Sydney home prices drop for the second month

The Australian property industry is still in its slow phase as the new report showing that the Sydney home prices fell for the second consecutive month due to low in demand from the regulatory crackdown. The report also shows that the current average home price is the worst the state ever face in four years.

According to the Bloomberg, the dropped occurred due to regulatory crackdown done by the authority pushing the mortgage rates higher. The data compiled by the news agency shows that the prices fell 1.2 percent more in December from November plunged giving a total of 2.6 percent fell for the two months.

Previously, the country properties price manage to increase for almost 55 percent within 7 years as mortgage rates plunged to five-decade low. This is due to stimulus by the Australian government to increase the price after 2008 plunged. The increase in demand including from lots of foreigners leads to Sydney home prices to double in value.

Elsewhere in Australia, a breath of relief can be felt as home prices in Melbourne and Perth is increasing steadily keeping the overall home price in Australia at a great rate. Perth lead the gainer with an increase of 2.3 percent from its previous drop.

According to the statement released by CoreLogic RP Data head of Research, Tim Lawless in the Australian Financial Review, "It's only a month, we won't see consistent rises in Perth. Values there are still down over the quarter and year to date. I expect to see the 2.3 percent increase get clawed back over the next quarter."

Lawless also predicted that 2016 will not see many changes in the housing market and he also predicted that there will be a moderate decline in the market for this year according to Sydney Morning Herald.

Although the average price has been dropping, Sydney and Melbourne's homeowner has been enjoying their return on investment throughout the year 2015. Most of the homeowners in Sydney managed to add $82,000 more in their return on investment while for Melbourne owner they are adding $60,400 more value in their properties.

While the price has been fluctuating in major cities across Australia, its rental price has been flat for the entire year. So far, Hobart is the only city with an improving rental rate for 2015. According to the analyst, the situation occurred due to dwelling values rising at a faster pace than rental rates and it is vice versa for Sydney causing its housing price to decline.