The regions in Australia's capital cities where home prices have fallen and risen the fastest over the past year

Heath Holden/Getty ImagesThe Sydney to Hobart Yacht Race — conducted from where home prices have fallen the fastest to where they’ve risen the most over the past year.
  • Australian home prices have fallen 3.5% over the past year.
  • The national price decline has been led by Sydney and Melbourne.
  • Regions in those cities have also seen the largest price declines over the past year. In contrast, more affordable capital city markets have seen home values increase.

Australian home prices have fallen for 13 consecutive months, leaving the national median price at $538,668, down 3.5% from the same period a year earlier.

The declines were once again led by the top end of the market, including in Sydney where prices fell by 7.4%, the fastest annual pace since February 1990. Melbourne prices also fell by 4.7% over the year, the second-steepest percentage drop across the capitals behind Sydney.

Unsurprisingly, regions in those cities accounted for the top 10 largest declines across the capitals in the year to October.

CoreLogic

However, reminding us all that Australia is not one housing market but many, while falls of up to 14.4% were seen in these cities over the past year, values in more affordable capital city markets actually increased, ranging from 1% in Adelaide to as much as 9.7% in Hobart over the same period.

Tim Lawless, Head of Research at Corelogic, says the falls in Australia’s most expensive cities largely reflect the impact of tighter lending standards, a trend that he expects will continue.

“It’s clear that lenders are also focusing more on loan serviceability and reducing their exposure to borrowers with high debt levels relative to their incomes,” he says.

“These measures help to explain the underperformance of more expensive housing markets were borrowers may find it challenging to secure finance.

“With credit availability remaining tight and rising inventory levels, we expect there will be further downside pressure on housing values as we move through spring and into summer and the new year.”

As has been seen over the past year, those anticipated declines are likely to be concentrated in markets where home values are more stretched as a multiple of household income than in more affordable regions.

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