Values Down 2.7% In 12 Months But No Crash Likely

Corelogic’s October home value index reveals that home values have fallen 2.7% nationally since last year’s September peak.

Half of Australia’s capital cities have seen values track lower over the past 12 months. The remaining capital cities, as well as regional markets, have recorded a slowdown in the annual pace of growth as well, as the housing downturn becomes more broadly based.

Across September, national dwelling values fell 0.5%, with values tracking lower across five of the eight capital cities for the month, while five of the seven ‘rest of state’ regions recorded a fall in values over the month too.

Monthly change in capital city values

Representing 60% of the national market, Sydney and Melbourne are now the primary drag on overall housing market. Sydney has fallen 6.1% and Melbourne 3.4% in the past 12 months while Brisbane, Adelaide, Hobart and Canberra continue to rise, albeit at a slower pace.

                    MONTHLY            ANNUAL

Hobart            +0.4%                       +9.3%

Canberra        +0.3%                       +2%

Brisbane         +0.2%                       +0.8%

Adelaide         -0.2%                        +0.7%

Darwin           -0.4%                         -3.7%

Sydney           -0.6%                         -6.1%

Perth              -0.6%                        -2.8%

Melbourne   -0.9%                         -3.4%

Regional market trends

Regional markets, where housing values have generally been more resilient to falls than in the capital cities, are now showing more challenging conditions. Despite regional Western Australia being the only ‘rest of state’ region to record a decline in dwelling values over the past twelve months, the September quarter saw values dropping in Regional NSW (-1.3%), Regional VIC (-0.2%), Regional QLD (-0.6%), Regional SA (-0.3%) and regional WA (-3.4%).

Premium property prices key driver of downturn

Weak housing market conditions across the most expensive quarter of properties in Sydney and Melbourne are a key driver of the housing downturn.

Dwelling values across Sydney’s most expensive quarter of the market are down 8.4% over the past twelve months, while the least expensive quarter of the market is down only 3.3%. The divergence in performance across the broad valuation cohorts is even more significant in Melbourne, where the highest value quartile has seen values reduce 6.7% over the past twelve months while the lowest value quartile has actually recorded a 4.1% annual gain in values.

Regions trend lower

Most regions of Australia have seen dwelling values trend lower from their peaks, ranging from a 31.8% fall across regional Western Australia to a 0.2% slip across Regional Victoria. Four regions continue to see dwelling values at record highs: Brisbane, Hobart, Canberra and Regional Tasmania.