Australian home values have fallen for the second year in a row, marking the worst run for the national property market in 16 years.
The slide comes despite the Reserve Bank of Australia slashing the cash interest rate six times in little more than a year, suggesting the availability of cheaper credit is only tempering the property slump rather than kick-starting a recovery.
Analysts RP Data-Rismark report that capital city dwelling values fell 0.4 in 2012, with the decline coming on the back of a 3.8 per cent fall in 2011.
‘‘This is the first time we’ve had back-to-back value declines for an index that goes back to 1996,’’ said RP Data senior research analyst Cameron Kusher. ‘‘It is clear that the previous strong value growth conditions to which many home owners became accustomed to in recent years are well and truly behind us.’’
Mr Kusher said the interest rate cuts amounting to a 135 basis point fall since October 2011 had ‘‘helped’’ the market but were being blunted by weak consumer confidence and affordability concerns.
‘‘The median price of a dwelling across the country is $483,000 – that’s a big commitment. And I just don’t think people are showing a large propensity to go and make that sort of commitment at the moment. People aren’t used to these kind of conditions.’’