Yahoo Finance Property prices plummet $9,491 in a month
Aussie property prices suffered their fourth consecutive month of declines in August, marking the biggest drop in 39 years.
CoreLogic’s national Home Value Index (HVI) recorded a 1.6 per cent decline over the month - the largest month-on-month decline in 39 years.
Every capital city, apart from Darwin, is now in a housing downturn, with a similar scenario playing out across the rest-of-state regions, where only regional South Australia recorded an increase in housing values for the month.
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The median value for a home in Australia is now $738,321 down from $747,812 in July. That’s a loss of $9,491 in a month.
For the combined capitals, the median value was $808,287 in August and the median value for the combined regions was $594,006.
Sydney continued to lead the downswing, with values falling 2.3 per cent over the month, however weaker conditions in Brisbane accelerated sharply through August, with values falling 1.8 per cent.
But Sydney still has the highest median home value, coming in at $1,066,493.
CoreLogic’s research director, Tim Lawless, said Brisbane’s shift into decline had been acute after almost two years of sustained growth due to record-high internal migration and relative affordability.
“It was only two months ago that the Brisbane housing market peaked after recording a 42.7 per cent boom in values,” Lawless said.
“Over the past two months, the market has reversed sharply, with values down 1.8 per cent in August after a 0.8 per cent drop in July.”
Regions follow suit
After going from strength to strength during the pandemic, the fall in regional home values had started catching up with the capital cities, the CoreLogic report found.
Regional home values were down 1.5 per cent in August, compared with a 1.6 per cent fall in values across the combined capitals.
The falls come off the back of massive price increases since the start of the pandemic.
Between March 2020 and January 2022, regional dwelling values surged more than 40 per cent compared with a 25.5 per cent rise for the combined capitals.
“The largest falls in regional home values are emanating from the commutable lifestyle hubs where housing values had surged prior to the recent rate hikes,” Lawless said.
“Over the past three months, values are down 8 per cent across the Richmond-Tweed, down 4.8 per cent across the Southern Highlands-Shoalhaven market and down 4.5 per cent across Queensland’s Sunshine Coast.“
Property price outlook
Despite the recent weakness, housing values across most areas remained well above pre-COVID levels.
Home values in all capital cities and rest-of-state regions, bar Melbourne, remained 15 per cent or above the levels recorded in March 2020, implying most homeowners had a significant equity buffer before their home was likely to be worth less than what they paid.
“A 15 per cent, peak-to-trough decline would roughly take CoreLogic’s combined capitals index back to March 2021 levels,” Lawless said.
“Additionally, many homeowners would have had at least a 10 per cent deposit and paid down a portion of their principal. The risk of widespread negative equity remains low.”
Lawless said he expected the downturn would continue to play out through the remainder of the year, and possibly into 2023.
“It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” he said.
“From current levels, interest rates are likely to increase by at least another 75 basis points and there is a good chance advertised stock levels will accumulate through the spring selling season, providing more choice for buyers and adding further downwards pressure on housing values.”
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