This article is from the Australian Property Journal archive
ALMOST 30% of all suburbs across Australia’s capitals and regional areas saw a loss in housing values over the past three months, according to CoreLogic, with Melbourne and Perth driving opposite ends of the spectrum.
Melbourne (79.1%) and regional Victorian suburbs (73.8%) made up the majority of falls in the August quarter. Values also decreased across more than half of the suburbs in Hobart (54.3%), Darwin (51.2%), and Canberra (51.6%).
Perth, meanwhile, saw all 302 of its suburbs record a rise in prices, while 127 of the 146 locations across regional Western Australia posted a rise. Value increases across Perth ranged from a 1.8% rise in Marmion in the city’s north-west, to 10.6% in Henley Brook in the north-east.
It is a remarkable turnaround for Perth, where 60.1% of Perth suburbs were in decline in the September quarter of 2022.
CoreLogic tracks prices across 3,655 suburbs across Australia. Nationally the portion of suburbs in quarterly decline was 29.2% in August, which has risen from 17.2% a year ago. Behind Melbourne, Sydney has seen the biggest increase in the share of suburbs in decline over the past year, from 3.8% to 25.9%.
Early signs of a slowdown are being seeing in Adelaide and Brisbane, where 3.1% and 3.8% of suburbs respectively recorded falls.
Over the past months, the pace of quarterly price growth overall has continued to ease, to 1.3% in the August quarter. This is down from 2.0% in the three months to April of this year, and down from 3.3% in the June quarter of 2023. The
CoreLogic economist Kaytlin Ezzy said quarterly value declines are becoming more common as high interest rates, cost of living and affordability challenges continue to bite, leading to a “healthier” market in Victoria, she told Australian Property Journal.
“Total listings supplies are now sitting about 30% above where they usually are for this time of year across Melbourne and about 40% above where they usually are for this time of year across regional Victoria. So that’s putting significant downwards pressure on values.
“We’re also seeing an impact to demand from the higher taxation environment that’s come through across Victoria, and a lot of investors maybe reconsidering and looking at other markets to invest in.”
“And then additionally, we’ve also seen a healthier supply of new housing stocks and new properties being built across the state compared to some of your other states. So that’s really helped keep a lead on affordability and arguably made Victoria a much healthier market compared to some of the other markets that are characterised by really low supply and not many new properties coming to market.”
CoreLogic data showed that in Melbourne, declines were most concentrated in more affluent regions, with 100% of suburbs in the Mornington Peninsula recording decreasing values, while just one suburb in the inner south (Carrum) and three suburbs in the inner east (Box Hill, Deepdene, Canterbury) saw values rise over the quarter. A similar pattern played out in regional Victoria, with Ballarat (100%), Geelong (97.8%) and Bendigo (89.3%) recording the highest concentration of falls.
“We are expecting the national pace of price growth to continue to ease and that will naturally translate into more suburbs starting to see weakness and fall into negative growth,” Ezzy told Australian Property Journal.
“We’re expecting that through the spring selling season as we go into that busier listing period where there is more choice for buyers, especially if we don’t see a commensurate rise in buying activity as we do in listing activity.”
Over the four weeks to 8th September, new listings levels at the national level have been around 17% above average and about 5% above where they were this time last year.
“So they have been stronger, likely due to some people maybe trying to beat that spring selling season and also maybe people who had held off selling during that downturn, during the rate tightening cycle when values weren’t at their peak, maybe holding off until values are on the rise again,” Ezzy told Australian Property Journal.
“And so we might be seeing more sellers choosing now to come to market.
“We also might be seeing some more motivated sellers. So maybe more households that haven’t been able to keep up with the high interest rate environment for as long as we sort of anticipated it being, choosing to sell their property while values are still high.
“For any households out there that are motivated to sell because of those high interest rates, they’re likely going to see a fairly healthy capital growth in their property value, which should help cover off any remaining debts,” she said.
While total listing levels have remained fairly subdued, the unseasonably high flow of new listings has seen stock levels accumulate, with the total listing count rising from around 25% below average at the start of 2024 to 12.4% below average.
The vendor discounting trend has compressed at the national level compared to last year. Sellers in Darwin continue to offer the largest discounts across the capitals, at 4.6%, followed by Hobart (4.1%), while stronger selling conditions in Perth has seen the median vendor discount fall to 2.6%.
Meanwhile, the time it takes to sell property has trended higher year-on-year. Properties are selling quicker than a year ago in Perth and Adelaide, with the median selling time at 11 and 27 days, respectively.
