Housing decline is slowing and could soon bottom out, analysts have claimed.
The RP Data-Rismark Home Value Index has indicated a 0.2% seasonally-adjusted decline for capital city home values. The result follows drops of 0.3% in May, 0.4% in April and 0.5% in March.
RP Data research director Tim Lawless said the slowing decline suggests the effects of this year's natural disasters are filtering out of the results.
"In January we saw Aussie home values fall by 1.2% which was the weakest monthly result on record. Over the March quarter home values were down 1.8%. Since that time we have seen the rate of decline slow along with an improvement in our leading indicators, like vendor discounting and time-on-market," he commented.
Lawless said these indicators show the market may be reaching the bottom of its cycle. However, he said any return to capital gains for the market is unlikely to come soon. Lawless commented that RBA rate hikes could further exacerbate the weak market.
"Market conditions are clearly being dampened by low levels of consumer confidence fuelled by interest rate speculation and global economic jitters. The higher-than-expected CPI figures earlier this week
are likely to reignite the interest rate debate which is not going to assist with an improvement in consumer sentiment," Lawless said.
Rismark managing director Christopher Joye predicted that the Reserve Bank will raise rates at least once and possibly twice to combat inflation.