SYDNEY, Aug 1 (Reuters) - Australian home prices suffered their sharpest monthly fall in July since late 2011 as declines gathered pace in Sydney and Melbourne sank into the red, data showed on Wednesday.
Property consultant CoreLogic said its index of home prices nationally dropped 0.6 percent in July from June, leading to an annual fall of 1.6 percent.
Values in the combined capital cities fell 0.6 percent in the month and 2.4 percent for the year.
The slowdown has been greatest in Sydney, where prices were down 5.4 percent in the year to July, while Melbourne eased 0.5 percent. Declines were sharpest in the most expensive segments of the housing market, while the more affordable sectors suffered much less.
Sydney and Melbourne comprise about 60 percent of Australia’s housing market by value and 40 percent by number.
Demand has been sapped by tougher regulations on bank lending and by a general rise in borrowing standards amid revelations of widespread malpractice in the financial sector.
Many small- to medium-sized banks have also recently raised rates on some mortgage products, blaming higher wholesale funding costs, although the major banks have yet to move.
The pullback in prices comes after years of stellar growth.
“Since peaking in September last year, the Australian housing market has recorded a cumulative 1.9 percent fall in value; a relatively mild downturn to date considering values remain 31 percent higher than they were five years ago,” said CoreLogic Head of Research Tim Lawless. (Reporting by Wayne Cole Editing by Paul Tait)