Decline in new home sales eases

The fall in Melbourne property values further eased in April with positive signs stirring however the possibility of tightening credit could throw a spanner in the works.

Prices fell across all capital cities except Canberra over the month, with a 0.7 per cent drop in Sydney, a fall of 0.6 per cent in Melbourne and a 0.4 per cent decline in Brisbane, according to CoreLogic’s hedonic home value index.

Tim Lawless, CoreLogic’s head of research said, “The main theme is the rate of decline is easing off and price falls are mellowing but geographically we are seeing more places around the country recording negative growth.”

“It’s a clear indictment of tighter credit policies, particularly for owner occupiers.”

Mr Lawless said a modest gain, albeit from a low base, in housing finance approvals, according to the Australian Bureau of Statistics’ (ABS) February report, was a positive indicator credit was starting to free up.

An interest rate cut next month could stimulate the market, but with credit availability the major hurdle for borrowers, the question is, by how much.