National dwelling prices were unchanged on a monthly basis in March, with values falling by -0.2 percent across the combined capital cities and rising by 0.4 percent in regional markets. At just 1.2 percent, the annual rate of house price growth was at its lowest level since December 2012. While all capital cities other than Sydney, Perth and Darwin managed to record positive growth, regional markets experienced much stronger growth than the combined capital city rate, at 2.6 percent and 0.8 percent respectively for the year. 

According to Paul Dales from Capital Economics, prices are only likely to drop further over the next couple of years, thanks mostly to an increase in housing stock: "That usually means that the balance of power is shifting from the seller to the buyer and that's why we think house prices will probably continue to edge lower over the next few years across most of the capital cities... Sydney and Melbourne might be overvalued to the tune of 25 per cent or so... But at the other end of the spectrum, some cities aren't particularly overvalued at all, places like Perth and Darwin."

According to CoreLogic data, Darwin saw the biggest fall in annual prices at -7.52 percent, followed by Perth at -2.41 percent, and Sydney at -2.10 percent. All other capitals recorded positive growth, with Hobart recording the biggest increase at 12.96 percent, and Melbourne performing strongly at 5.33 percent. Despite strong results in Melbourne, the recent decline of auction clearance rates may be an indicator of cooling conditions. According to Domain Group data, citywide weekly clearance rates in Melbourne have fluctuated between 64 and 70 percent so far this year, with rates hovering just above 50 percent in many suburbs.

According to CoreLogic, national transaction volumes are much lower on an annual basis at -6.8 percent. The volume of new and total stock listed for sale is also lower than it was a year ago, with new listings down in all markets except Sydney and Melbourne. While mortgage approvals are still well above their long term average, they fell sharply by -6.2 percent in February 2018 thanks to a large decrease in apartment approvals. The oversupply of apartments is one of the biggest issues for the Australian market at the moment, with any significant drop to apartment prices sending a clear warning sign to rest of the market.

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