Australia’s housing market downturn has become more widespread, with four in five house and unit markets analysed across the capital cities recording a fall in values over the past three months, almost double the number that declined in the previous quarter.
CoreLogic’s interactive Mapping the Market tool shows 79.5% or 2,405 house and unit markets analysed saw values go backwards over the September quarter, a significant increase on Q2, when 1,293 markets recorded a decline. This saw values in 38.3% of house and unit markets fall below the levels recorded this time last year.
Using the CoreLogic Home Value Index, a methodology widely used by economists and institutions nationally, 3,027 capital city house and unit markets were analysed to provide an overview of quarterly and annual changes to median values.
CoreLogic Economist Kaytlin Ezzy said the updated data confirmed the extent of the housing market downswing and demonstrates how much it has accelerated over recent months following six successive hikes in the cash rate.
“This analysis shows the effect of the three 50 basis point rate hikes through the September quarter, plus the lagged impact of the first two hikes (totalling 75 basis points) in May and June, so it’s not surprising to see significantly more markets recording a decline in value,” she said.
The CoreLogic Home Value Index showed dwelling values across the combined capitals declined -4.3% over the September quarter, down from a -0.8% decrease recorded over the three months to June.
“Across the capital’s house markets, Sydney, Melbourne, Canberra and Hobart each saw 100% of analysed suburbs experience a decline in values over Q3, with Hobart the only city also recording a quarterly decline in all unit markets analysed,” Ms Ezzy said.
“Darwin, Perth and Adelaide had the lowest portions of house and unit markets experiencing quarterly declines, which is a reflection of those cities reaching their peak a little later in the cycle than the larger capitals. Unsurprisingly, Sydney and Melbourne also have the highest share of house and unit markets recording an annual decline in values.”
Growth conditions across Sydney weakened significantly over the period, with house values falling
-9.7% since April, and -7.0% over the past quarter, taking values -6.4% lower than this time last year. All 563 suburbs analysed saw house values fall over Q3, however Ms Ezzy said the pace of decline varies significantly from suburb to suburb.
“The rate of quarterly decline ranged from a -13.0% fall in Asquith to a -0.8% drop in Silverdale. The recent declines saw the median house value across 34 suburbs fall below $1m over the past quarter. Additionally, house values in 72.6% of suburbs are now below the levels recorded this time last year,” she said.
“Continuing the trend seen across Sydney’s house market, quarterly value declines became more widespread across Sydney’s unit market, with only 13 of the 304 markets analysed recording a rise in unit values over the quarter.
“These resilient unit markets were concentrated in the city’s South West and Blacktown regions, as well as Rushcutters Bay (where values rose 0.6% in the quarter) and Sydney (where values held steady) in the Inner City region. As values continue to decline, the portion of suburbs recording an annual decline in unit values also increased, from 12.7% in June to 69.7% over the 12 months to September,” she said.
Melbourne house values fell -4.2% over the quarter, and -4.9% over the year, taking the median value to $937,131. Following Sydney’s trend, all of the 385 house markets analysed across Melbourne recorded a quarterly decline in value, with 27.5% recording a fall of more than -5%. Additionally, 74.3% of house markets saw values fall from this time last year.
“The number of suburbs with a median house value above $3 million has fallen, from six in June to four in September, while the count of house suburbs with a median below $750,000 rose to 71. Unit values in Melbourne have also deteriorated over the quarter, with 88.4% of the 251 unit markets analysed recording a fall in values in Q3,” Ms Ezzy said.
Growth conditions across Brisbane fell into negative territory over the quarter, with house values falling -5.1%. Just 5.7% of suburbs analysed saw values rise in Q3, 15 of which were located in Ipswich, and four in Logan – Beaudesert. However only two suburbs recorded a decline in house values compared to this time last year, Chermside (-1.8%) in the north, and Fairfield (-0.3%) in the south. Despite recording significant growth over the past two years, 70.5% of Brisbane’s house markets have a current median value below $1m, and 11.0% have a median value under $500,000.
After rising 3.5% over the June quarter, unit values across Brisbane rose just 0.4% over the three months to September. Despite the overall rise, unit value declines have become more common at the granular level, with 46.7% of the 169 suburbs analysed recording a quarterly decline in values, up from 5.6% in June. These suburbs were largely concentrated in the Inner City (25), as well as Brisbane’s South (17), East (12) and Logan – Beaudesert (12). None of the suburbs analysed saw unit values fall over the 12 months to September.
Since the onset of COVID, house values across Adelaide have risen by nearly 50%, taking the median value around $225,000 higher to approximately $705,000.
Ms Ezzy said the strong growth in values has seen 78 of the 302 suburbs analysed record a current median house value in excess of $1m, while one suburb (Toorak Gardens - $2,068,356) has a median above $2m.
“However, Adelaide has not been immune to rising interest rates, with house values now -0.5% below the July peak. Over the last quarter, 48% of house markets in Adelaide saw values fall, while no suburbs recorded an annual decline in values.
Adelaide’s unit market remains the strongest out of the capitals, with quarterly growth in unit values at 2.4%, but down from a recent peak rate of 4.9% over Q2. Of the 95 unit markets analysed, 11.6% saw values fall over the quarter, while only one recorded a decline in values over the year (Findon -3.0%).
Perth house values declined -0.5% in the September quarter, taking Perth’s median house value to $584,941. More than half (53.1%) of the 288 house markets analysed recorded a decline over the quarter, and a further 9.7% saw values fall from a year ago. Almost one in five (19.8%) house markets now have a median of $1 million or more, while 26.4% of suburbs are below $500,000. With a median house value of $584,941, Perth remains the cheapest capital to buy a house in.
Unit values declined across 37 (38.9%) suburbs over the quarter, while 18 recorded a year-on-year decline. Of Perth’s 95 unit markets analysed, 71 had a median value below $500,000, while none had a median value above $750,000.
Following a -4.3% decline in house values and a -5.3% fall in unit values over the quarter, Hobart is the only capital city to record a decline in all house and unit markets analysed over the three months to September.
Darwin was the only capital city to see both house and unit values increase over the quarter (up 1.4% each). Of the 37 house markets analysed, 13 saw values fall over the three months to September, while just three saw values fall compared to this time last year. Unit values declined in five suburbs over the quarter, while no suburbs recorded a year-on-year decline. Darwin remains Australia’s most affordable capital to buy a unit in, with a median value of $377,432.
Canberra’s median house value fell -5.2% the September quarter to $1,009,575, with all of the 85 suburbs analysed recording a decline over Q3. Over one in four house markets (27.1%) saw values fall year-on-year. Unit values declined in 40 of the 47 suburbs analysed, while only one suburb, Macquarie, in the city's North-West, recorded a year-on-year decline in unit values.