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  • Corelogic

Almost 80% of Australia’s house and unit markets now in decline

Updated: Oct 20, 2022

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.

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