MORE data reveals that Geelong’s property boom is over.
The latest CoreLogic Home Value Index released on Friday showed dwelling values contracted nearly 2 per cent in the three months to the end of February.
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The 1.9 per cent quarterly drop comes after the peak of the market in November and includes a .8 per cent fall in February alone.
The median dwelling value in Geelong settled at $547,093.
But the value is still holding on annually at 3.9 per cent above the median value recorded the same time last year.
CoreLogic head of research Tim Lawless said banks’ tighter lending rules for homebuyers contributed to the fall in value and settled sales.
“The fact that we are seeing weakening housing market conditions across regions where home values were previously rising at a sustainable pace and economic conditions are relatively healthy is a sign that tighter credit conditions are having a broad dampening effect on buyer activity,” Mr Lawless said.
Regional markets generally held firmer than capital cities, with dwelling values down 1.4 per cent over the past 12 months in the regions, compared to a 7.6 per cent fall in capital city values. Melbourne’s value dropped 9.1 per cent over 12 months.
Gartland Property agent Nathan Ashton said it was a sign the market was heading to a more stable, balanced phase after strong growth over the past 18 months.
The index showed the peak of the market was in November, when auction clearance rates started to moderate.
An Advertiser analysis of Geelong auction clearance rates, reported on Thursday, showed the success rate had halved since the same time last year.
“(The index) is probably spot on in regards to when the heavy changes in clearance rates occurred,” Mr Ashton said.
“A lot of people started to feel the pressure in regards to borrowing.”
Mr Ashton said while more vendors weren’t selling under the hammer, they were not being disadvantaged price-wise as buyers sought the safety of purchasing subject to finance.
“It’s the cream on the top — the (sales) where you were getting $20,000 to $40,000 above because of the competitive nature. It’s not as common place now.
“It’s probably back to there it was 12 to 18 months ago and for the 10 years before that, which is nice and consistent and balanced.”