SYDNEY, April 3 (Reuters) - Home prices across Australia’s major cities slipped for a sixth straight month in March as tighter lending rules clamped down on investment demand in Sydney and Melbourne, although some other centres fared better.
Property consultant CoreLogic said on Tuesday its index of home prices for the combined capital cities slipped 0.2 percent in March, after it fell 0.3 percent in February.
Annual growth in prices slowed to just 0.8 percent, from 2.0 percent in February and 10.5 percent in the middle of 2017.
Prices in Sydney dropped 0.3 percent in March, leaving values down 2.1 percent on the year. Values had been surging at more than 20 percent a year at the peak of the boom.
Melbourne saw a dip of 0.2 percent in the month, although annual growth stayed positive at 5.3 percent.
Home prices outside the major cities edged up 0.4 percent in March to be 2.6 percent higher on the year. Combined, prices across the nation were flat for the month and up 1.2 percent for the year.
“The stronger combined regional markets performance continues a trend that began to emerge in October last year,” noted CoreLogic head of research Tim Lawless.
The cool-down in the major cities has been much desired by Australia’s bank watchdog. It tightened standards on investment and interest-only loans, leading banks to raise rates on some mortgage products.
The Reserve Bank of Australia has also been concerned that debt-fuelled speculation in property could ultimately hurt both consumers and banks.
The inexorable rise of prices in the major cities put homes out of the reach of many first-time buyers, becoming a political flashpoint.
Yet the boom has also been a boon for household wealth, with the government statistician estimating that housing stock is worth a heady A$6.9 trillion ($5.29 trillion) - four times the size of annual gross domestic product.
The explosion in wealth had helped offset weakness in wages, so a sustained downturn in home prices could now act as a drag on consumer confidence and spending. ($1 = 1.3055 Australian dollars) (Reporting by Wayne Cole Editing by Paul Tait)