Real home prices have fallen in most Australian capitals over the past decade

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  • Home prices, adjusted for inflation, have fallen in most Australian capitals over the past decade.
  • Only Sydney, Melbourne and Hobart have seen real values increase over this period.
  • CoreLogic expects real values will continue to fall in the coming quarters.

Real home prices have gone backwards in most Australian capital cities over the past decade.

As seen in the chart below from CoreLogic, with the exception of Sydney, Melbourne and Hobart where real values have risen by 43.3%, 38.7% and 6.4% respectively, inflation-adjusted values have fallen in all other capital cities, ranging from 1% in Canberra to 25% in Perth.

Source: CoreLogic

“These latest figures really highlight just how narrow value growth has been in the national housing market over the past decade,” says Cameron Kusher, research analyst at CoreLogic.

“It also highlights that low mortgage rates alone have not been the key driver of value growth — mortgage rates are the same in Sydney as they are in Perth yet the former has recorded real growth of 43.3% while the latter has seen values fall by 25.0%.”

The divergence largely reflects differing economic conditions across individual capital cities, along with other factors such as population increase.

However, with prices now falling in many capitals, including in Sydney and Melbourne, it’s meant that real values in all capital cities aside from Hobart are now below their cyclical peak.

Source: CoreLogic

Kusher details the change in real values by individual capital below:

  • Sydney values are 5.3% lower than their June 2017 peak.
  • Melbourne values, after peaking in December 2017, are currently 0.9% lower.
  • Brisbane values peaked back in March 2008 and are currently 12.5% lower.
  • Adelaide values currently sit 7.4% below their June 2010 peak.
  • Perth has seen values fall by 28.5% from their peak in December 2006.
  • Hobart, with values increasing a further 10.9% over the past year, it is the only city where real dwelling values are currently at their peak.
  • Darwin values peaked in March 2013 and have since fallen by 28.2%.
  • Canberra dwelling values are 6.8% lower than their June 2010 peak.

Looking ahead, Kusher expects real, inflation-adjusted dwelling values, will continue to fall over the coming quarters.

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