SYDNEY, May 1 (Reuters) - Home prices across Australia’s major cities eased for a seventh straight month in April as tighter lending standards at banks cooled investor demand in Sydney and Melbourne, although regional markets fared better.
Along with tougher rules from regulators, lenders have also been raising borrowing requirements amid revelations of widespread malpractices on loans and financial advice within a range of major institutions.
The result has been a marked pullback in demand in the once red-hot markets of Sydney and Melbourne, ending a boom in prices that ran for a whole five years.
Property consultant CoreLogic said on Tuesday its index of home prices for the combined capital cities slipped 0.4 percent in April, after a 0.2 percent dip in March.
That left prices down 0.1 percent for the year, the first negative reading since late 2012.
“Weaker housing market conditions are primarily a factor of tighter credit policies which have dampened investment activity,” said noted CoreLogic head of research Tim Lawless.
Prices in Sydney dropped 0.4 percent in April, leaving values down 3.4 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 0.4 percent in the month, while annual growth slowed to 3.7 percent.
Home prices outside the major cities edged up 0.4 percent in April to be 2.4 percent higher on the year. Combined, prices across the nation fell 0.1 percent for the month and were up a slight 0.2 percent for the year.
The slowdown in the major cities has been much desired by Australia’s bank watchdog which 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. (Reporting by Wayne Cole Editing by Jacqueline Wong)