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ResidentialLindsay SaundersTue 01 Nov 22

Housing Downturn Spreads Nationwide

corelogic home values october 2022

Australia’s housing downturn has widened with all but one location recording a drop in housing values last month.

CoreLogic’s national Home Value Index (HVI) moved through a sixth month of consistent declines as values fell a further 1.2 per cent in October.

Across the capital cities the month-on-month decline ranged from a 2 per cent fall in Brisbane to Perth where dwelling values nudged 0.2 per cent lower. 

For the rest-of-state regions, monthly falls of more than 1 per cent were recorded in regional NSW (-1.7 per cent), regional Victoria (-1.4 per cent) and regional Queensland (-1.3 per cent). Only regional SA recorded a positive, up 0.1 per cent.

Although more regions are recording a fall in housing values, the rate of declines remain diverse, according to Corelogic. 

The pace of falls has eased over the past two months across Sydney and the past three months in Melbourne but has gathered momentum in Brisbane where home values are now falling the most rapidly of any capital city or rest-of-state region. 

The changing dynamic across the largest cities has seen the rate of decline across the combined capitals index ease from a 1.6 per cent drop in August to 1.4 per cent in September and 1.1 per cent in October.

Change in home values to October 31, 2022


MonthQuarterAnnualTotal returnMedian value
Sydney-1.3%-5.3%-8.6%-6.9%$1,036,727
Melbourne-0.8%-3.1%-5.6%-2.8%$767,711
Brisbane-2.0%-5.4%8.4%12.5%$728,615
Adelaide-0.3%-0.6%16.5%20.3%$654,079
Perth-0.2%-0.7%4.0%8.6%$559,043
Hobart-1.1%-4.1%-1.0%2.7%$696,344
Darwin-0.8%0%4.9%11.2%$507,821
Canberra-1.0%-4.3%1.0%4.7%$876,657
Combined capital-1.1%-4.0%-3.1%-0.5%$787,485
Combined regionals-1.4%-4.1%6.6%10.5%$581,412
National-1.2%-4.1%-0.9%1.8%$721,018

^ Source: Corelogic

CoreLogic research director Tim Lawless said it was probably still too early to claim the worst of the decline phase was over.

“Despite the easing in the pace of decline, with Australian borrowers facing the double whammy of further interest rate hikes along with persistently high and rising inflation, there is a genuine risk we could see the rate of decline re-accelerate as interest rates rise further and household balance sheets become more thinly stretched,” he said.

“To date, the housing downturn has remained orderly, at least in the context of the significant upswing in values.

“This is supported by a below-average flow of new listings that is keeping overall inventory levels contained.

“There’s also tight labour market conditions, an accrual of borrower savings and a larger than normal cohort of fixed interest rate borrowers, who have so far been insulated from the rapid rise in interest rates.”

Housing values across most of the broad regions remain well above pre-Covid levels, implying most homeowners remain in a positive valuation position relative to their purchase price.

At the combined capital city level, housing values have fallen 6.5 per cent after a 25.5 per cent rise through the upswing. 

Sydney home values are down 10.2 per cent since peaking in January (after a 27.7 per cent rise) and Melbourne values down 6.4 per cent since February (after rising 17.3 per cent).

Change in home values to end of October, 2022

Change in home values to end of October 2022
^ Source: Corelogic

Across the 310 SA3 sub-regions analysed nationally (excluding areas with low sales or low confidence scores), only 16 regions remained at cyclical highs at the end of October, with a skew towards the more affordable areas of Perth and Adelaide and a mix of regional markets.

House values have continued to fall at a faster rate than unit values across most regions. Capital city house values were down 1.2 per cent in October compared to a 0.7 per cent decline in unit values.

This underperformance across the lower density sector had been a feature of the downturn, partially offsetting the substantially larger rise in house values through the growth phase, Corelogic said.  

Through the upswing, capital city house values increased by 29.9 per cent, which was more than double the rise in unit values at 13.2 per cent. 

Since peaking in April, capital city house values have reduced by 7.2 per cent while unit values are down 4.2 per cent.

ResidentialAustraliado not useMelbourneBrisbaneReal EstatePolicyPolicy
AUTHOR
Lindsay Saunders
The Urban Developer - News Editor
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Article originally posted at: https://theurbandeveloper.com/articles/corelogic-housing-values-fall-october-2022