CoreLogic’s home value results for December show that prices nationally have fallen 8.0% from their peak, with the combined capital cities down 8.6% and the combined regions 6.6% lower.
Sydney is leading the decline nationally, with values down 12.7% from their peak. This is followed by Brisbane (-9.4%) and Hobart (-9.3%), which are both nearing double-digit price falls:
Interestingly, two markets – regional South Australia and regional Western Australia – are at their cyclical peaks, brushing aside the Reserve Bank of Australia’s (RBA) aggressive interest rate hikes.
While Melbourne’s dwelling values have only fallen 8.3% from peak, it is the one capital city market where values are about to fall below their pre-COVID level.
As illustrated in the next chart, Melbourne dwelling values were only tracking 1.5% above their March 2020 pre-pandemic level at the end of December:
This means that Melbourne home values will likely erase all of their pandemic gains by February 2023.
Because Melbourne was most heavily impacted by COVID lockdowns, the city’s housing market experienced a relatively modest boom in house prices over the pandemic. This means that Melbourne prices now don’t need to fall as far to erase all of these gains.
By contrast, both Sydney (-12.7%) and Brisbane (-9.4%) have experienced larger price falls in response to the RBA’s aggressive tightening. But because these two markets experienced far stronger price growth over the pandemic, values still remain well ahead of their March 2020 level:
Sydney dwelling values were 8.8% above their March 2020 level in December, whereas Brisbane’s were 31.1% higher.
At the 5-city aggregate level, home values are still 11.1% above their March 2020 level.
