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FED: Australian home values dip 8pct in 2008, Darwin in bubble

By Alison Bell
31 Jan 2009 12:59 AM
Subject: FED: Australian home values dip 8pct in 2008, Darwin in bubble FED: Australian home values dip 8pct in 2008, Darwin in bubble Eds: Embargoed until 0100 AEDT Saturday, January 31

MELBOURNE, Jan 31 AAP - The government's funding boost for first home buyers did little to arrest an eight per cent fall in residential property values during 2008, research has found.

Residential property values nationwide fell, on average, almost eight per cent last year and were expected to slide modestly in the first half of 2009, Australian Property Monitors (APM) said.

"While the first home buyers' share of the mortgage market increased in November 2008, these latest figures show that the government's first home buyers boost scheme has done little, thus far, to stem falling property prices," APM's senior economist Liam O'Hara said.

In the last few months of 2008, the Reserve Bank of Australia (RBA) cut interest rates substantially to help breathe life into the faltering economy.

But nationally house and unit prices declined for the second consecutive quarter in the last three months of 2008, although houses retained their value better than units, APM said.

December quarter residential property values showed Perth's property bubble has burst and moved to Darwin where unit prices surged by 20.5 per cent during 2008, with house prices jumping 5.5 per cent.

A 1.9 per cent easing in Perth's house and unit prices during the December quarter capped a bleak year for the capital city's property market, where house prices plunged 7.9 per cent and unit prices fell 4.7 per cent, APM said.

Canberra house and unit prices fell 3.8 per cent and 1.8 per cent respectively during the December quarter, leading to a 6.7 per cent and 2.6 per cent decline respectively in prices during the year.

Sydney's market also felt the pinch. This was despite a more modest 0.7 per cent easing in house prices during December, with unit prices holding steady.

Over the year, house and unit prices in Australia's largest city dropped 4.2 per cent and 3.8 per cent respectively.

Melbourne's market presented a more modest and mixed picture, with house prices firming 0.9 per cent during December and unit prices easing 0.1 per cent.

Throughout the year, the Victorian capital saw house prices rise by 0.9 per cent and unit prices decline by 1.5 per cent.

Brisbane experienced a mixed December quarter, with house prices rising 3.3 per cent and units backtracking 3.5 per cent.

Unit prices during 2008 dropped 6.5 per cent and house prices firmed 0.4 per cent.

December unit values in Hobart fell 4.4 per cent, leading to a 7.1 per cent plunge over the year.

House prices fared better, holding steady in December but easing 0.4 per cent over the year.

Adelaide's housing market was flat in December but unit prices increased by 2.1 per cent.

The market held onto its gains throughout 2008 with house and unit prices rising 2.9 per cent and 2.7 per cent respectively.

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FED: Australian home values dip 8pct in 2008, Darwin in bubble