Have property prices in Australia really hit rock bottom?

PHOTO: Property prices are staring to increase in Sydney and Melbourne. Picture: Matthew Vasilescu/AAP Source: News Corp Australia

Property prices in Sydney and Melbourne have begun improving for the first time since 2017 but there are still plenty of reasons why prices aren’t going to skyrocket any time soon.

The first green shoots started appearing in Australia’s housing market last month, with dwelling values up by 0.1 per cent in Sydney and 0.2 per cent in Melbourne in June, according to CoreLogic.

“They are the two markets that have seen the largest falls since 2017, with Sydney values down 15 per cent from its peak, and Melbourne down by about 11 per cent,” CoreLogic head of research Tim Lawless told news.com.au.

“But they are also the two markets with the strongest economic conditions and this probably explains why we are seeing the first signs of recovery.”

Mr Lawless said Melbourne and Sydney, which were also the two most unaffordable markets, were the only places so far to have responded to lower interest rates.

“We have seen an ongoing and consistent trend for smaller declines in those markets,” he said.

“But there are some headwinds and this is why we don’t expect prices to bounce back.”

Mr Lawless said credit policy was still very tight making it harder to get home loans than it was a few years ago.

There were also some other factors that could come into play.