Australian property prices have continued to decline, but the speed of the downturn appears to be easing.
Capital city house prices declined six times slower in the December quarter compared to the previous quarter, while unit prices fell three times slower.
Domain’s latest House Price Report found house prices fell by $66,000 below the March 2022 peak, while unit prices were $27,000 below the December 2021 peak, across the capitals.
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But prices are still nowhere near pre-COVID levels, with house prices still 25.4 per cent higher and unit prices 5.1 per cent higher than before the pandemic property boom.
Domain chief of research and economics Dr Nicola Powell noted the slowdown followed the record price decline experienced in the September quarter of 2022.
“The spring selling season bore the brunt of interest rate shocks and sky-high inflation levels. This is why the September quarter saw house prices fall at their fastest quarterly rate,” Powell said.
“Now, in the December quarter, the data suggests that the peak rate of the quarterly decline has passed as buyers have had time to adjust to the new norm of rising debt cost and reduced borrowing capacity.”
There were “green shoots” for the months ahead, Powell said, with the potential end of interest rate rises later this year attracting more buyers and sellers. But she added that this did not discount the uncertain Reserve Bank environment and tight serviceability requirements from the banks.
State of the states
House prices in Sydney, Brisbane and Canberra saw an eased pace of quarterly decline, Domain found, while Melbourne, Adelaide and Hobart stabilised.
Despite losing momentum, quarter-on-quarter, more expensive cities like Sydney and Canberra still recorded their steepest annual drop in house prices in their histories.
Sydney house prices dropped 10.9 per cent annually to $1.4 million, while Canberra prices declined 6 per cent to $1.1 million.
Adelaide was the only capital city to have new record-high house and unit prices, increasing 0.2 per cent quarterly to $783,705 for houses and 3.7 per cent quarterly to $422,080 for units.