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2017 was a year when Australia's housing market didn't go to script

13 January 2018

In WA, searches across the entire capital of Perth have risen 12 percent on past year with a particular emphasis on upmarket suburbs like Cottesloe, where the median house price has recently cracked the $2 million mark.

Home values in Sydney shrunk by 0.9 per cent in December while Melbourne prices slipped by 0.2 per cent, marking the first monthly drop in the Victorian capital since February 2016, property data group Core Logic's Home Values Index says.

ADELAIDE is bucking a nationwide fall in property values over the past quarter, according to CoreLogic.

Mr Lawless expects tighter credit policies to be the primary driver for a softer phase in the housing market cycle throughout 2018.

Core Logic said a 20 per cent turnaround in property price growth was likely.

Cautious buyers, the risk of rising interest rates and banks clamping down on loans will likely cool Australia's "overheated" property market in 2018, but that does not mean buyers will be faced with an endless array of bargains.

Darwin also saw dwelling values drop 0.9 per cent for December, and 2.9 per cent for the quarter.

CoreLogic head of research Tim Lawless said Melbourne had been "far more resilient to negative growth" compared to Sydney due to factors including "stronger population growth, lower affordability hurdles and a higher rate of jobs growth".

"The city's annual rate of growth is now tracking at just 3.1 per cent; a stark difference to the recent cyclical peak when values were rising at the annual rate of 17.1 per cent only seven months ago", Mr Lawless added.

"Our clearance rate will perhaps be in the mid to high 60s and I think if that is the case there will be another year of growth in 2018, but it's probably going to be in that range of single digits, 6-9 per cent, so another reasonably good year", he said.

The harbour city's dwelling prices retreated 0.9 per cent in the month of December to be 2.1 per cent lower over the quarter. Obviously values have come off about 11 per cent from their peak (since 2014).

About half of Australia's capital cities recorded dropping house prices by the end of 2017.

Hobart, Melbourne and Canberra had the strongest growth, up 12.3 per cent, 8.9 per cent and 4.9 per cent respectively. For Aussies looking for affordable housing that's increasing in value, it may be time to look south.

2017 was a year when Australia's housing market didn't go to script