CoreLogic’s daily dwelling values index is around two months away from recording its biggest ever house price fall.
As illustrated in the next chart, home values across Australia’s five major capital cities had plunged 9.1% from their peak as at 8 January, which is the second biggest and steepest price fall on records dating back to 1980:
Even if the monthly 5-city aggregate price decline moderates to 1% per month (compared with 1.2% in December 2022), this means the current housing correction will be the largest on record by the end of February.
To date, Australia’s housing correction has been driven by the three largest cities, namely Sydney (-13.1%), Melbourne (-8.6%) and Brisbane (-9.8%).
Sydney’s current housing correction (-13.1%) is likely to become its biggest on record in April, overtaking the record 17.4% peak-to-trough decline recorded between 2017 and 2019:
Melbourne’s current housing correction (-8.6%) is likely to become its biggest on record by the end of March or early April, overtaking the record 11.1% peak-to-trough decline recorded between 2017 and 2019:
Finally, Brisbane’s current housing correction (-9.8%) is likely to become its biggest on record by the end of this month or early next, overtaking the record 10.8% peak-to-trough decline recorded between 2010 and 2012:
The bottom line is that we are only months away from house price records being smashed across several key markets.
And given the Reserve Bank of Australia is near certain to lift interest rates again at its February monetary meeting, as well as the pending fixed rate mortgage cliff, national dwelling values will very likely fall by at least 15% peak-to-trough by the end of this cycle.
