SYDNEY: Australian house-price growth slowed in July as elevated borrowing costs and stubbornly sticky inflation weighed on demand, with Melbourne declining for a fourth consecutive month.

Market bellwether Sydney advanced 0.3%, taking its median home value to a record high A$1.17mil or about US$780,000, property consultancy CoreLogic Inc said yesterday.

Brisbane climbed 1.1%, supplanting Canberra to become the second-most expensive market. Perth was the best performing capital with a 2% gain, while Hobart and Darwin fell, leaving an overall 0.5% increase in dwelling values in July.

“While the headline growth rate remains positive, it is clear momentum is leaving the cycle,” said Tim Lawless, research director at CoreLogic.

He highlighted that the rolling quarterly pace of growth in Sydney eased to 1.1%, down 5% at the same time last year.

Australian property prices have generally defied the Reserve Bank of Australia’s (RBA) restrictive monetary policy as limited supply and a surge in immigration growth has underpinned demand.

But with prices in cities such as Sydney reaching eye-watering levels, the strength of the market is beginning to dissipate in the face of affordability issues.

CoreLogic’s index has advanced 37.4% since the onset of Covid-19, despite the RBA’s 13% interest-rate increases between May 2022 and November 2023.

 - Bloomberg