Australia’s home values continued to stabilise over January, according to Corelogic’s monthly update released this week.
CoreLogic’s national Home Value Index (HVI) fell a further 1.0% in January, a slight improvement on the 1.1% decline recorded in December, and the smallest monthly drop since June last year.
The slower pace of decline was evident across most capital cities, except for Adelaide (down just 0.8%) and Perth (down 0.3%) where housing values have held firmer since interest rates began rising in May.
Every capital city posted a fall through the month, led by Hobart (down 1.7%) and Brisbane (1.4%), while the smallest drops were recorded in Perth and Darwin (0.1%). Sydney’s median dwelling value dropped below $1 million for the first time since March 2021, falling 1.2% in January, an improvement on December’s 1.4% decline.
CoreLogic Research Director Tim Lawless said that there are definite signs some momentum has gone out of the downturn.
The most noticeable easing in value falls can be seen across the premium end of the housing market, where the country’s most expensive properties have led both the recent upswing as well as the current downturn. Across the combined capitals, the rolling quarterly rate of decline in the upper quartile values has improved from a recent low of -6.1% over the September 2022 quarter to -4.0% over the three months to January.
“While this trend towards improving conditions across premium markets is not evident in all cities, it is most apparent in Sydney’s detached house market”, Lawless said.
“Quarterly declines in this market segment eased from 7.7% in the three months to August, to 3.9% in the three months to January.”
Lawless believes the improvement could be reflective of more buyers taking advantage of larger price drops across the premium sector, where house values are down 17.4% since peaking in January 2022.
Through January, regional housing values continued to record a milder rate of decline than each of their capital city counterparts, a trend seen through most of the downturn to-date.
“Despite easing rates of internal migration and a partial erosion of the pre-pandemic affordability advantage, regional housing values are holding up better than capital city markets”, Lawless said.
Based on the monthly index, the national Home Value Index (HVI) is down 8.9% since peaking in April last year, making this the largest and fastest decline in values since at least 1980 when CoreLogic’s records began.
So far, Brisbane (down 10.8%) and Hobart (10.8%) have registered the largest declines on record for those cities. Sydney home values are down 13.8% and not far from surpassing the 2017-19 drop of 14.9% to set a new decline record.
However, Lawless stressed the importance of understanding this downturn in context.
“Record declines in home values follow a record upswing, both in magnitude and speed. The national HVI was up a stunning 28.6% in the space of just 19 months,” he said.
“Despite the recent sharp drop in values, every capital city and rest-of-state region is still recording home values above pre-pandemic levels, although Melbourne’s index would only need to fall a further 0.4% before equalling the March 2020 reading”, he concluded.
