- Australia’s housing downturn is spreading across the country with around 60% of homes now worth less than what they were a year ago, according to estimates from Westpac Bank.
- Median prices in Sydney, Melbourne, Perth and Darwin have fallen 7.4%, 4.7%, 3.3% and 2.9% respectively over the past year.
- Annual price growth in Brisbane is currently 0.4%, and may too turn negative in the months ahead.
Australia’s housing downturn is spreading across the country with around 60% of homes now worth less than what they were a year ago, according to estimates from Westpac Bank.
“The spread of weakness across price tiers and geographies has continued to widen,” said Matthew Hassan, Senior Economist at Westpac.
“Our estimates suggest just under 80% of all dwellings by share of dwelling stock have recorded price declines over the last six months with just under 60% recording annual price declines.
“About one in five properties are experiencing annual price declines of over 5% per annum with closer to two in five in New South Wales.”
According to the ABS, there were an estimated 10.1 million homes in Australia as at the end of the June quarter this year. Based in Westpac’s estimate, that suggests around six million home nationwide have fallen over the past year.
The chart below from Westpac looks at the evolution in home values across Australia going back to 1994, breaking the results down by both direction and speed of price movements on an annualised basis.
While the proportion of Australian homes that have seen values fall over the past year is lower than prior downturns, there’s little doubt that price falls in Perth and Darwin earlier this decade have now spread to larger markets across Australia, in particular, Sydney and Melbourne.
According to CoreLogic’s latest Home Value Index, prices in Sydney and Melbourne fell by 7.4% and 4.7% respectively in the year to October. The percentage decline in Sydney was the largest since early 1990.
These cities contain around 40% of all Australian homes.
Along with annual declines of 3.3% and 2.9% respectively in Perth and Darwin over the past year, it largely explains why Westpac estimates that around 60% of Australian homes have fallen in value over the past year.
In CoreLogic’s latest Home Value Index, median prices in Brisbane — Australia’s third-largest capital city — were unchanged in both October and for the quarter, leaving the increase over the past year at just 0.4%.
If prices in Brisbane don’t lift modestly in the months ahead, annual price growth there could also turn negative, likely increasing the proportion of total Australian homes that are falling on an annualised basis.