Falling home prices in Sydney and Melbourne might just have signalled the end of Australia's 30-year housing super cycle.
Dwelling values fell 0.9 per cent in Sydney and 0.8 per cent in Melbourne during May, according to data from research agency Cotality.
Along with rising rates and poor affordability, the tightening of property tax concessions in the budget and a political shift towards lower migration might mean a decades-long upswing was nearing a close, AMP chief economist Shane Oliver said.
Financial deregulation, low mortgage rates, high migration, generous tax concessions for property investors and the growth of two-income households boosting purchasing power had fuelled a super cycle during the past 30 years, Dr Oliver said.
That took house prices from well below trend to 20 per cent above trend, resulting in record unaffordability.
