Sydney and Melbourne home prices have gone backwards, and national price growth is at its weakest in nearly two years, according to the latest data.

Australia’s most expensive city, Sydney, had a 0.2 per cent drop in home prices in November, according to CoreLogic.

Meanwhile in Melbourne, where housing values have fallen over 10 of the past 12 months, there was a 0.4 per cent fall over the month.

This takes the values of homes in the Victorian capital 2.3 per cent lower over the past year.

“The downturn is gathering momentum in Melbourne and Sydney,” CoreLogic’s research director Tim Lawless said.

“While the mid-sized capitals, which have dominated the growth cycle of late, are also losing steam.”

That includes Brisbane, where quarterly growth has eased, and Adelaide, where prices – while still rising – are at their lowest growth since June last year.

Nationally, home prices rose by just 0.1 per cent in November, down from an annual growth of 5.5 per cent.

Later rate cuts

The latest figures come as Australian mortgage holders are expected to have to wait even longer for interest rate cuts.

Three of the big four banks have now pushed out their forecast of the RBA, bringing in a rate cut to May next year.

ANZ was the latest to make the call, pushing the first projected cash rate cut out from February to May 2025.

The bank’s economic team has also cut the number of predicted cash rate cuts next year from three to two cuts of 0.25 per cent.

Until interest rates came down, it was hard to see the weakening housing trend turning around, Lawler said.

“A lower cash rate will be a positive factor for housing markets,” Lawless said.

“Lower mortgage rates will provide a lift to borrowing capacity, and, along with lower inflation, should see an improvement in serviceability assessments and see a further rise in consumer sentiment.”

However, he said it would not be expected to lead to an immediate rise in home prices.

“A couple of rate cuts might be enough to shore up a declining trend in home values, but it is hard to see any upward pressure returning until interest rates reduce more substantially and affordability barriers are less formidable.”

Three of the big four bank economic teams now believe the next move from the RBA will be a 0.25 percentage point cut in May 2025.

NAB and Westpac also last month pushed back their forecasts for the timing of the first cash rate cut from February to May 2025

CBA still predicts the first cash rate cut will come in February next year.

Around the cities

Along with Sydney and Melbourne, Hobart was the only other capital city to record a drop in home values in November.

Canberra had the slowest growth rate of the other capital cities at 0.1 per cent in November.

The median dwelling price in the national capital is $851,731.

Perth recorded the strongest growth for the month, with home values rising by 1.1 per cent, bringing the median price to $808,090.

Regional roundup

Outside the capitals, regional home values have remained stronger, with the combined regional home value going up 0.3 per cent for the month and 1.1 per cent for the quarter.

However, state-by-state regional housing prices vary significantly, with regional Victoria cutting home prices in November while regional Western Australia prices were up by 3.3 per cent.

This article first appeared on View.com.au. Read the original here