An orderly correction of property prices is continuing across Australia as buyers and sellers react to changing market forces swayed by a 6.1% spike in inflation and increasing mortgage rates.
For September, industry researcher CoreLogic has found values for all housing slipped 1.4%, a slightly better result than in August (-1.6%). This comes after two years of 20% plus increases in property values, so owners are still sitting pretty.
But CoreLogic’s Home Value Index revealed that falls were not uniform across the country. Each capital city is experiencing a slightly different recalibration.
Sydney dropped 2.3% in August and 1.8% in September. This possibly reflects the stellar price performance the city has enjoyed since the beginning of 2020. In contrast, Melbourne dipped between 1.2% and 1.1% while Brisbane recorded drops between 1.8% to 1.7%.
However, prices have remained almost static in Adelaide and Perth, reflecting each state’s thriving economies. They both registered respective falls of 0.2% and 0.4% for August and September.
Capital city sales in the 12 weeks to September 30 were down 12.2% compared with last year’s corresponding period. It remains 6.5% above the five-year average.
While national and capital city data is valuable, you should always check price trends in the area you own or wish to buy. Discussing the local market with a real estate agent will be invaluable, regardless of whether you’re buying or selling.
Other interesting data revealed by the research included:
- Many owners are “waiting out” a correction, there is no evidence of distressed sales or panicked selling.
- The initial shock of a rapid rise in interest rates may have passed.
- Buyers appear to have now priced in further rate hikes.
- If the Reserve Bank of Australia continues the pace of rate rises that began in May, value falls may accelerate.
- Auction clearances have steadied and started to edge upwards.
- Consumer confidence continues to improve, supported by full employment with the jobless rate now at 3.5%. The employment-to-population ratio increased 0.1% to 64.3%.
- After two successive years of double-digit growth, all capitals are down a collective 5.5%, or $46,100. In the regions, values have fallen 3.6%, or $21,700.