By Su-Lin Tan
Updated 29 Jan 2019 — 5:23 PM,first published at 3:46 PM
Sydney and Melbourne house prices have tumbled again as they edge closer to a full 10 per cent decline over the past year.
In the lead up to the official price update for January at the end of the week, CoreLogic data shows Sydney house prices have fallen 9.5 per cent in the 12 months up to January 27.
Melbourne's house prices have fallen 8.2 per cent. In contrast, Brisbane and Adelaide's house prices were flat over the year.
Times are hard with sales slowing, more days on the market and higher discounts. Bloomberg
At the end of last year, Sydney and Melbourne's house prices had fallen 8.9 and 7 per cent respectively.
Nationally, prices fell 4.8 per cent.
The number of unsold homes in both Sydney and Melbourne continues to rise, with total listings now 24 to 34 per cent higher than last year. New listings have retreated as vendors shy away from the market.
Another indication of the momentum that is gathering in the housing downturn is the growing discount between the listing and final selling price.
CoreLogic data this week shows the average discounting in Sydney is between 8.8 to 8.9 per cent whereas Melbourne sellers are accepting a 7.3 to 8.6 per cent discount for their properties. A 5 per cent discount was the norm during the housing boom.
Option for federal intervention
Falling prices and slowing demand would further curtail housing supply and investments, likely to shave off about 0.5 percentage points in GDP growth, Capital Economics' Marcel Thieliant said in a note on Monday.
Property market ends 2018 with 4.8 per cent fall in house prices: CorelogicBy Ingrid Fuary-Wagner
The only saving grace would be a fiscal move by the federal government to support the housing market such as through an increase in the first home buyer's grant as seen in 2008, he said.
In 2008, the tripling in the First Home Owner Grant from $7000 to $21,000 boosted home sales. The impact of the grant increase was particularly positive then as the market was already recovering.
However, a new grant this time might not be as successful, Mr Thieliant warned.
"The key point though is that additional support for first-time home buyers would probably come too late to prevent a slump in dwellings investment," he said.