House prices have dropped across several Australian capital cities in recent months, with major banks predicting falls of 2-3% by the end of the year. This was reported by Qazaqyia.kz citing The Guardian.
But after a decade of accelerating house prices, this wouldn't make a significant dent in housing affordability.
Monthly data from Cotality shows the median price of a dwelling in Australia peaked at $944,000 in March, retreating to $937,000 by the end of June – a 0.7% drop. But over the past 10 years the median home price has risen more than $400,000.
Another way of thinking about house prices is in terms of how long they would take to pay off. In 2016, the average dwelling price in Australia was equal to 13 years and four months of a typical household's disposable income, Guardian Australia columnist Greg Jericho has calculated.
By March this year, the equivalent figure had risen to more than 17 years. Even with a 10% drop from the March peak, the median dwelling would cost more than 15 years of a household's disposable income.
These figures highlight that short-term declines in the Australian housing market do not address the long-term affordability crisis. Economists suggest structural reforms are needed to curb price growth.