CoreLogic’s latest dwelling value results show that dwelling values are now falling across each of the major capital city housing markets:
Coast-to-coast house price falls.
The broad-based decline in dwelling values is also reflected in CoreLogic’s interactive Mapping the Market tool, which shows that values fell across 79.5% of Australia’s 3,027 house and unit sub-markets in the September quarter, up from 41.9% of markets over the June quarter.
Commenting on the results, CoreLogic Economist Kaytlin Ezzy explained that the Reserve Bank’s aggressive interest rate hikes are biting hard:
“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”…
Ezzy also noted that Adelaide and Perth values are holding up better, which is reflected in the above daily dwelling values index:
“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”.
“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.”
It is important to remember that it typically takes two-to-three months for the Reserve Bank’s rate hikes to be passed onto borrowers.
The Reserve Bank’s latest monetary policy statement also mentioned that “the Board expects to increase interest rates further over the period ahead”, suggesting a few more 0.25% rate hikes will arrive over coming months.
Based on these facts, Australian house prices will continue to fall for the foreseeable future.
