Australia’s property market has finally come off the boil after a resilient run of growth at a time of high interest rates and inflationary pain.

The 0.1% fall in December followed a flat result in November and a gradual slowing in the pace of growth over the course of the year.

Sign up for Guardian Australia’s breaking news email

The research director at the property data firm, Tim Lawless, was unsurprised by December’s negative figure.

“This result represents the housing market catching up with the reality of market dynamics,” he said.

After a moderate downturn in 2022, as the Reserve Bank of Australia first started hiking interest rates, home prices starting rising again even as the fight against inflation raged and the cash rate stayed elevated.

Given constrained borrowing capacity and cost-of-living pressures, Lawless said the price growth clocked between February 2023 and October 2024 was surprising.

Perth eked out the biggest property price increase in December, a 0.7% gain to be a whopping 19.1% higher annually.

Adelaide’s market rose 0.6% over the month, and Brisbane 0.5%. Darwin also clocked a 0.4% improvement after a lacklustre 12 months.

“With worsening affordability constraints and reduced borrowing capacity, we have seen buyer demand pushed towards lower priced markets, which has, in turn, supported stronger growth conditions in these areas,” Lawless said.

Sign up to Breaking News Australia

Get the most important news as it breaks

All other capitals recorded price declines in December, with Sydney down 0.6% and Melbourne 0.7%.

Dwelling values are now down 3% points annually in Victoria’s biggest city.

Regional markets fared a little better than their urban counterparts, with the combined regionals gauge up a modest 0.2% over the month and 6% annually.

In a welcome development for financially stretched renters, the 4.8% rise in rents over the calendar year was the smallest annual lift since the 12 months ending March 2021.

Despite rents starting to stabilise as overseas migration returns to more normal levels and household sizes trend higher, annual growth is still double the 2% pre-pandemic average.

Source: www.theguardian.com