Australia’s house price correction is accelerating, according to CoreLogic’s daily dwelling values index, which measures price changes across the five major capital city markets.
In the week ended 11 August, dwelling values fell another 0.38% at the aggregate 5-City level – the 14th consecutive weekly decline:
14th consecutive weekly house price decline.
The decline was once again led by Sydney, where values tanked 0.62%. Brisbane (-0.41%) and Melbourne (-0.19%) also posted price falls, whereas Adelaide (+0.09%) and Perth (+0.03%) recorded small rises in values:
The three largest capitals again post house price declines.
Quarterly price falls have accelerated, with values down 3.1% across the five major capitals. This has been driven overwhelmingly by heavy falls across Sydney (-5.2%) and Melbourne (-3.4%), whereas Brisbane values (-0.8%) have fallen more slowly. By contrast, Adelaide continues to report strong growth (+3.1%), with Perth values (+1.0%) also rising moderately:
Big price falls across Sydney and Melbourne.
As shown clearly in the next chart, dwelling values began falling sharply after the Reserve Bank of Australia (RBA) first commenced hiking interest rates on 3 May:
RBA rate hikes trigger steep house price falls.
Sydney dwelling values have now fallen 6.0% from their mid-February peak, with most of these losses occurring after the RBA’s first rate hike.
Melbourne’s dwelling values have fallen 3.7% from their peak, again with most of these losses occurring after rates were lifted.
Brisbane’s dwelling values only began falling in mid-June, but have so far fallen 1.5% from peak.
Finally, dwelling values at the 5-City aggregate level are down 3.3% from their peak, dragged down by Sydney and Melbourne.
With further aggressive rate hikes forecast over the remainder of this year, house price falls are certain to steepen across Sydney, Melbourne and Brisbane, as well as spread into the other capital cities and regions.
What started in Sydney and Melbourne will soon become a national house price correction. And it will likely be the biggest in living memory.
