Image – Canva
  • House values fell by -1.1% nationally in December
  • Melbourne and Sydney recorded the steppest declines
  • 2022 was the first year since 2022 whereby home values fell nationally across the year

While the monthly rate of decline moderated between September and November, housing markets across Australia finished the year on a weaker note, according to newly released data.

CoreLogic’s national home value index recorded a -1.1% decline in December, which takes housing values down by -5.3% during the 2022 calendar year.

In November, house prices fell by 1% nationally. 

This re-acceleration in the downward trend was driven primarily by a steep decline across Melbourne and Sydney.

The overall decline is the first time since 2018 whereby national home values have fallen over the calendar year.

The 12 months to December 2022 is also the largest calendar-year decline since 2008 when values fell -6.4% thanks to the Global Financial Crisis.

On an annual basis, values fell in Sydney by -12.1% and -8.1% in Melbourne. Hobart (-6.9%), Canberra (-3.3%) and Brisbane (-1.1%)

However, price falls eased across Brisbane and Hobart, while value movements in Perth actually increased for the second consecutive month.

Perth, Adelaide and Darwin all recorded annual price rises of 3.6%, 10.1% and 4.3% respectively.

The year of contrasts

Tim Lawless of CoreLogic noted that 2022 had been a year of contrasts, with housing values rising through the first four months with falls occurring once the Reserve Bank of Australia (RBA) began its tightening cycle in May.

“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen -8.2%, following a dramatic 28.9% rise in values through the upswing,” said Mr Lawless.

Mr Lawless said that most capital cities and broad ‘rest-of-state’ regions recorded weaker performances across the upper quartile relative to the lower quartiles and middle of the market.

“The more expensive end of the market tends to lead the cycles, both through the upswing and the downturn,” Mr Lawless said.

“Importantly, recent months have seen some cities recording less of a performance gap between the broad value-based cohorts.

“Sydney is a good example, where upper quartile house values actually fell at a slower pace than values across the lower quartile and broad middle of the market through the final quarter of the year.”

Tim Lawless

tim lawless
Tim Lawless. Image – CoreLogic.

Regional property market remains strong

While housing values across the combined regional areas of Australia remained virtually unchanged – up by just 0.1% – results were mixed across the states.

Regional NSW recorded a -2.7% fall, while Regional Victoria recorded a decline of -1.3%.

“Regional SA has been the stand out for growth conditions over the past year, with values up 17.1% through 2022,” Mr Lawless said.

“The well-known Barossa wine region led the capital gains with a 23.0% rise in values over the calendar year.”

Despite the downturn across most of the country, housing values are generally above their pre-Covid levels.

“Melbourne is the only capital city where the current downwards trend is getting close to wiping out the entirety of COVID gains, with dwelling values only 1.5% above March 2020 levels,” Mr Lawless added.

“The relatively small difference between March 2020 and December 2022 levels can be attributed to a number of factors, including a larger drop in values during the early phase of COVID, a milder upswing through the growth cycle and the -8.3% drop since values peaked in February.”

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