aerial view suburb houses
Image – Canva.
  • Units proved more resilient than houses, with prices falling at half the rate
  • Prices have dropped by over $50K since the April peak in 2022
  • The price surge experienced earlier added more than triple the amount lost at $180K

House prices continued to drop this month, with the latest from CoreLogic’s Home Value Index showing national dwelling values fell 1.0% in November.

It is the seventh month of decline, with the data showing prices have dropped some 7% or $53,400 below the peak value recorded in April 2022.

This welcome decline in Australia’s housing market comes after house prices in Australia rose over 28%, adding almost $180,000 to the average value of a home, according to CoreLogic.

While the price drop may sound like good news for home buyers, the CoreLogic report said this is the smallest monthly decline since June.

CoreLogic’s Tim Lawless said the slowing rate of decline was mostly due to the Sydney and Melbourne markets, but similar activity could be observed across other capitals and the regions.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3%. That has now reduced by a full percentage point to a decline of -1.3% in November.  In July, Melbourne home values were down -1.5% over the month, with the monthly decline almost halving last month to -0.8%,” said Mr Lawless.

“The rate of decline has also eased across the ACT (from a -1.7% fall in August), and is no longer accelerating in Brisbane. Most of the broad rest-of-state markets have also seen the pace of declines decelerate.

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls. However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.

“There is still the possibility that the pace of declines could reaccelerate, especially if the current rate hiking cycle persists longer than expected. Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

House price decline means more under $1 million

The house price decline also means that there are fewer suburbs that demand a seven figure premium.

The Property Tribune covered the CoreLogic data and report on Wednesday, which found almost 170 suburbs are no longer in the million dollar club.

Why are so many suburbs now under a million dollars? Mr Lawless said: “Many of these outer fringe suburbs that have fallen below the $1 million mark were previously showing median values that were only marginally over the seven-figure threshold, so in many cases, a small percentage drop in value has been enough to push values below $1 million.”

Mr Lawless added that housing values in more expensive suburbs are falling faster than the more affordable suburbs, but pointed out that these suburbs would require a significant price decline to drop below the million-dollar threshold.

There are currently 836 suburbs in Australia’s exclusive million-dollar club, with 347 of these in Sydney and 117 in Melbourne.

Units are better than houses

The report also found that for December, units in Australia’s capital cities only dropped 0.6% compared to houses which saw values dip at double the decline with 1.2%.

More broadly, unit values have fallen by 4.7% from its recent peak value, while houses saw an 8.4% fall in value.

“Every capital city apart from Hobart is recording a more resilient outcome for unit values relative to houses.  This trend can at least partially be attributed to the more moderate gains recorded during the upswing, but probably also reflects the unit sectors more affordable price point at a time when borrowing capacity has reduced,” Mr Lawless said.

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