Aussieproperty prices see biggest drop in value in almost 40 years
7:44am Sep 1, 2022
Australian property values have suffered theirbiggest monthly drop in almost 40 years as the market's downturn accelerates.
CoreLogic's national Home Value Index recorded afourth straight month of decline in August, with the retreat in pricesaccelerating and covering more of Australia.
The drop in August was 1.6 per cent, the biggestmonth-on-month decline since 1983.
Propertyprices dropped 1.6 per cent in August, the biggest month-on-month decline since1983. (Nine)
Every capital city apart from Darwin is now in ahousing downturn, and regional Australia isn't too dissimilar, with only SouthAustralia recording an increase in regional housing values for the month.
Sydney continued to the lead the downswing, withvalues falling -2.3 per cent in August.
But Brisbane also saw an accelerated decline, withvalues falling -1.8 per cent.
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CoreLogic's research director, Tim Lawless, saidBrisbane's shift into decline had been acute after almost two years ofsustained growth due to record high internal migration and relativeaffordability.
Housingvalues continue to fall across Australia, according to CoreLogicanalysis. (CoreLogic)
"It was only two months ago that the Brisbanehousing market peaked after recording a 42.7 per cent boom in values,"Lawless said.
"Over the past two months, the market hasreversed sharply with values down -1.8 per cent in August after a -0.8 per centdrop in July."
In regional areas, the fall was almost as extreme,with a 1.5 per cent drop in August.
That follows a sharper upswing though, withregional prices surging more than 40 per cent from March 2020 to January 2022,compared to 25.5 per cent for the capital cities.
Everycapital city apart from Darwin is now in a housing downturn, and regionalAustralia isn't too dissimilar, with only South Australia recording an increasein regional housing values for the month. (Rhett Wyman)
"The largest falls in regional home values areemanating from the commutable lifestyle hubs where housing values had surgedprior to the recent rate hikes," Lawless said.
"Over the past three months, values are downeight per cent across the Richmond-Tweed, -4.8 per cent across the SouthernHighlands-Shoalhaven market and -4.5 per cent across Queensland's SunshineCoast."
Only seven areas recorded a rise in housing valuesin August, including the northern suburbs of Adelaide (0.9 per cent), Perth'sNorth East and Mandurah (0.6 per cent/ 0.5 per cent respectively) and the CoffsHarbour-Grafton region (0.6 per cent).
Despite the recent weakness, housing values acrossmost regions remain well above pre-COVID levels.
Home values in all capital cities and rest-of-stateregions, besides Melbourne, remain 15 per cent more above the levels recordedin March 2020, implying most home owners have a significant equity bufferbefore their home is likely to be worth less than what they paid.
"A 15 per cent peak to trough decline wouldroughly take CoreLogic's combined capitals index back to March 2021levels," Lawless said.
"Additionally, many home owners would have hadat least a 10 per cent deposit and paid down a portion of their principal, therisk of widespread negative equity remains low."
Lawless expected the downturn will continue to playout through the remainder of the year, and possibly into 2023.
"It's hard to see housing prices stabilisinguntil interest rates find a ceiling and consumer sentiment starts toimprove," he said.
