New analysis from CoreLogic has found that a staggeringly large portion of Australia’s 3,027 capital city house and unit markets experienced value declines during the September quarter.
The research body’s “Mapping the Market” dataset for the third quarter of 2022 found that 79.5 per cent (or 2,405) of the country’s house and unit markets experienced receding values, leading to 38.3 per cent of these markets seeing values currently sitting at levels below the same period last year.
CoreLogic economist Kaytlin Ezzy labelled the data as “unsurprising” as it outlined the toll six successive rate hikes have had on the Australian housing market, adding that the firm’s September Home Value Index — which showed dwelling values in the combined capitals fell 4.3 per cent — supports this.
The capital cities most severely impacted by value declines are Sydney, Canberra, Melbourne, and Hobart, all of which saw “100 per cent of analysed suburbs experience a decline in values over Q3”, with Ms Ezzy adding that “Hobart [was] the only city also recording a quarterly decline in all unit markets analysed”.
She said that Darwin, Perth, and Adelaide had the lowest portion of markets experiencing a decline over the quarter, largely due to the lateness with which these cities reached their peak.
The hardest hit capital city was Sydney, where growth conditions have weakened to a point where houses are valued at 9.7 per cent lower than they were in April and 6.4 per cent lower than this time last year. Ms Ezzy detailed that all 563 analysed suburbs across the harbour city experienced falling values, though the speed of decline varied depending on location.
“The rate of quarterly decline ranged from -13 per cent in Asquith to -0.8 per cent in Silverdale. The recent declines saw the median house value across 34 suburbs fall below $1 million over the past quarter,” she said.
“Additionally, house values in 72.6 per cent of suburbs are now below the levels recorded this time last year.”
The health of the city’s unit market is not faring too well either, with only 13 of the 304 analysed markets experiencing growth throughout the quarter, with the pockets of resilience isolated in Sydney’s south-west and Blacktown region, as well as Rushcutters Bay — where prices rose 0.6 per cent — and Sydney — where values remained stable.
“As values continue to decline, the portion of suburbs recording an annual decline in unit values also increased, from 12.7 per cent in June to 69.7 per cent over the 12 months to September,” Ms Ezzy said.
Similarly, Melbourne experienced a turbulent September quarter, which concluded with values falling 4.2 per cent, dragging the city’s median price to $937,131.
Much like Sydney, every analysed suburb in the Victorian capital experienced value decreases. Adding to this, 27.5 per cent of those markets experienced a decrease that exceeded 5 per cent.
Ms Ezzy explained that such conditions have resulted in the number of suburbs with a median house value of above $3 million falling from six in June to four currently, while the portion of housing markets with a median price below $750,000 jumped to 71.
“Unit values in Melbourne have also deteriorated over the quarter, with 88.4 per cent of the 251 unit markets analysed recording a fall in values in Q3,” she said.
Looking at the rest of the national capitals, Ms Ezzy highlighted how growth in Brisbane entered negative territory during the quarter, with house values down 5.1 per cent. Despite this, only two suburbs recorded a decline in house values compared to the same time last year, while 70.5 per cent of the Queensland capital’s house markets have a median value residing below $1 million and 11 per cent have a median price of sub-$500,000.
Contrastingly, the city’s unit markets saw values rise 0.4 per cent; however, this is well below the 3.5 per cent price growth seen during the June quarter.
The slight bump in values has not been enough to slow down unit declines at a granular level, according to CoreLogic, with 46.7 per cent of the 169 analysed suburbs recording value declines over the quarter, up from 5.6 per cent in June.
Adelaide, where house prices peaked during Q3, has “not been immune to rising interest rates” despite prices rising approximately 50 per cent since the dawn of the COVID-19 pandemic, with Ms Ezzy explaining that “house values are not -0.5 per cent below the July peak”.
“Over the last quarter, 48 per cent of housing markets in Adelaide saw values fall, while no suburbs recorded an annual decline in values,” she said.
Meanwhile, the city’s unit market held its position as the strongest amongst the capitals as a result of 2.4 per cent growth throughout the quarter.
Perth’s median house price dropped to $584,941 at the conclusion of the September quarter after a 0.5 per cent decline in values. Of the city’s house markets, 53.1 per cent recorded a decline, with a further 9.7 per cent recording a decline from a year ago. Interestingly, nearly one-fifth of the city’s housing markets have a median value of $1 million-plus.
Darwin’s house and unit markets both experienced price increases of 1.4 per cent during the quarter, making it the only city in the country where this has occurred. No unit markets and three housing suburbs reported a year-on-year value drop.
The nation’s capital, Canberra, watched on as its median house price fell 5.2 per cent throughout the penultimate quarter of the year taking in to $1,009,575, with all 85 analysed suburbs experiencing a decline, while 40 of 47 unit markets experienced a decline in values.