Property downturn deepens as major market test looms

Australia’s median house price has fallen for the fifth month in a row ahead of the crucial spring selling season, but one segment of the market is holding up better than the rest of the country.Home prices fell 0.2% in August, the realestate.com.au Home Price Index shows, taking prices 2.7% below the peak recorded in March this year.The monthly price fall extended a downturn in values that began in Sydney and Melbourne late last year before spreading to the other capitals earlier this year following three rate hikes by the Reserve Bank.Senior economist at realestate.com.au, Eleanor Creagh, said higher interest rates were constraining borrowing capacities and weighing on housing demand.“While the pace of national price falls eased slightly in August, prices continued to decline across most capital cities,” she said.Adelaide recorded the largest price fall of the capitals in August, with the median home value declining by 0.9%. Picture: realestate.com.au/buyProperty prices have been further weakened by tax changes targeting investors that were introduced in the federal budget in May, with hot markets cooling as investor demand fell.“Momentum has slowed in markets that have been amon...