Abrupt yearly decline sends Australian residential real estate value spiralling down

In the 12 months to January, Australian dwelling values fell at their sharpest rate since May 2019.

According to CoreLogic’s latest Monthly Housing Chart Pack, Australia’s 10.9 million residential real estate dwellings now hold a value of approximately $9.2 trillion. 

This sum represents a 3.2 per cent decline in the three months to January and a 7.2 per cent in the preceding 12 months, the most in nearly four years.

Australia’s combined capital city dwellings saw their total value drop by 8.7 per cent in the year to January 2023, while the rate of decline in regional markets was less severe at 2.3 per cent. Regarding quarterly declines, CoreLogic revealed Australia’s regional markets (2.6 per cent) slightly bettered the performance of the capital city markets (3.3 per cent).

Residential property values rose in regional Western Australia (1.9 per cent) and South Australia (2.3 per cent) during the three months to January, while the shortest rate of decline among any capital city market was registered in Perth (0.4 per cent) followed by Darwin (0.4 per cent).

Over the year preceding January, dwelling values rose 15.3 per cent in regional South Australia, 4.9 per cent in regional Western Australia, and 2.5 per cent in regional Northern Territory. Similarly, Adelaide (6.9 per cent), Darwin (3.7 per cent), and Perth (2.7 per cent) recorded increases.

In every Australian capital city, the top 25 per cent of dwellings felt the brunt of the value decreases led by the 6.3 per cent decrease in home values for Brisbane’s top 25 per cent of dwellings, as opposed to the 1.7 per cent decrease in the bottom portion of the market experienced.

City by city, Sydney’s dwelling values are 13.8 per cent below their January 2022 peak, Melbourne’s market is down 9.3 per cent from its February 2022 peak, while Brisbane’s values are 10.7 per cent their highest point achieved last June.

Values in Darwin are 11.2 per cent lower than their May 2014 peak. In Hobart, values have decreased 10.8 per cent from May 2022, while similarly in Canberra there is an 8.6 per cent difference between current values and their peak, achieved in June 2022.

The more modest declines have been experienced in Adelaide, where values are just 2.1 per cent below their July 2022, and Perth, where the market peaked in the same month yet prices are only 0.9 per cent lower than they were then.

CoreLogic also reported sales volumes continued to trend lower due to depleted buyer demand, with the research firm estimating 550,550 sales took place nationally in the 12 months to January, marking a 19.1 per cent decline on the previous year; however, these figures are 4.6 per cent above the decade average annual sales volume.

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