CoreLogic’s daily dwelling values results for February are out, with values across the five major capital city markets declining only 0.1% over the month:
While this was the 10th consecutive monthly price fall, it was easily the smallest over the correction, down from the 1.1% fall recorded in January.
The sharp deceleration in price falls at the aggregate 5-city level was caused by a surprise 0.3% increase in dwelling values across Sydney, which offset falls elsewhere:
Over the February quarter, values were down 2.3% at the 5-city aggregate level, with Brisbane (-3.0%), Melbourne (-2.7%) and Sydney (-2.4%) posting the biggest losses, and values holding up better in Adelaide (-1.4%) and Perth (-0.2%):
Finally, dwelling values are now down 9.7% from their peak at the 5-city aggregate level, led by solid falls across Sydney (-13.5%), Melbourne (-9.6%) and Brisbane (-10.7%):
As noted earlier today, the correction should reassert itself over the months ahead given the Reserve Bank of Australia (RBA) has indicated that it will lift interest rates further in the months ahead.
These rate hikes will further reduce borrowing capacity, which should translate into lower home prices.
There is also the danger of increasing volumes of forced sales driving prices lower as roughly one quarter of Australia’s mortgage book resets this year from cheap pandemic fixed rate mortgages to variable rates that are more than double these levels.
