Quarterly Property Update
A month into 2023 and Australian property values continued to head south with a 1% decline in national dwelling values for January. As a result, there was a -3.2% drop over the quarter according to CoreLogic’s national Home Value Index (HVI).
Although median property prices are still falling across the country there are signs some wind has come out of the housing downturn’s sails. While the -1% dip continues into negative territory, the January statistic was a subtle improvement on the -1.1% fall seen in December.
CoreLogic’s Index is -8.9% off its April peak, making this the largest and fastest decline in values since 1980 when their record-keeping began. However, it pays to put this dwelling downturn in context, “Record declines in home values follow a record upswing,” said CoreLogic research director Tim Lawless.
All eyes on interest rates
While they aren’t the only driver of the downturn, interest rates have played a major role in steering the ship. Once the Reserve Bank decides to hit the pause button – which is largely tipped to be in the first half of 2023 – economic experts predict housing values are likely to stabilise.
At its first meeting for 2023, the RBA increased the cash rate by 0.25 percentage points on February 7, pushing the cash rate to a decade-high of 3.35%.
Top end price performance
Price declines in Australia’s prestige market, appear to be easing. Across our capitals, the rolling quarterly rate of decline in the upper quartile improved from a recent low of -6.1% over the September 2022 quarter to -4% in the three months to January.
CoreLogic data showed while this trend towards improving conditions for premium markets wasn’t evident in all cities it was most apparent in Sydney. Quarterly declines in Sydney’s top price bracket eased from -7.7% to August and then to -3.9% to January.
Regions still in favour
After extraordinary price growth in 2021, values in all regions are declining, albeit at a milder rate than each of their capital city counterparts.
Overall, CoreLogic recorded a combined regional market fall of -2.6% for the quarter to January 31. That’s a modest movement backwards after the combined non-capital city areas saw housing values surge 41.6% through the most recent upswing. Since peaking in June, the combined regionals index is only down -7.4%.
Melbourne
Melbourne’s median dwelling value is down -3.1% over the quarter. Data shows the Victorian capital has had a Covid trough to peak of 17.3%. After peaking in February 2022, the median dropped by -9.3%. Regionally, Victoria is -6.6% off its most recent peak in May 2022.
Sydney
The quarter to January’s close saw the median dwelling price fall by -3.9%, dropping below $1 million for the first time since March 2021. Sydney’s median peaked in January 2022 and has since experienced a -13.8% decline. After hitting its peak in May 2022, regional NSW closed the most recent quarter -9.7% off that high.
Brisbane
By January 31, Brisbane’s median dwelling price was down -4.8% for the quarter, surpassing the loses of both Sydney and Melbourne over the same time period. The capital of the Sunshine State had an exceptional trough to peak throughout the pandemic with the media skyrocketing 42.7%. Post peak in June 2022, the drop has been -10.7%. Across regional Queensland the median has come -7.1% off the June 2022 high.
Canberra
The ACT experienced a -3.4% decline of its median dwelling price during the three months to January’s end. Australia’s capital reached its price peak in June 2022 and has since come off the boil by -8.6%.
Perth
The Perth median appears to be plateauing with a modest quarterly move of just -0.1%. According to CoreLogic data the West Australian capital’s market only reached its peak in July 2022 and has come off just 0.9% since. The full trough to peak figure for Perth has been 25.9%. Regionally, the state is reportedly at its peak after experiencing a 32.1% increase through the recent growth phase.
To find out more about the current property landscape, reach out to us today.
Note: all figures in the city snapshots are sourced from: CoreLogic’s national Home Value Index (January 2023)
