Australia’s median home price has fallen 7.4% since peaking in October 2017, equating to a total decline in dollar terms of $40,590 in average weighted terms.
- Median values in Darwin and Sydney, and in regional Western Australia, have fallen by more than $115,000 since peaking. Median values in Perth and Melbourne have also fallen by more than $70,000.
- CoreLogic believes the national price downturn is likely to continue in the months ahead.
Australia’s median home price has fallen 7.4% since peaking in October 2017, according to updated analysis released by CoreLogic, equating to a total decline in dollar terms of $40,590 in average weighted terms.
However, the declines in some markets have been larger than others, as seen in the chart below from CoreLogic.
While the national median price has fallen by 7.4%, the decline in capital city markets has been more acute at 9.2%, or $59,478 in average weighted terms. That larger decline largely reflects relatively steep price falls in Sydney and Melbourne over the past couple of years, along with longer downturns in the mining capitals, Perth and Darwin.
In contrast, median prices in regional areas have only fallen 2.5% at this point in the cycle, or $9,464 in average weighted terms.
Currently, median prices in Hobart and regional Tasmania are the only markets where valuations still remain at the highest level on record.
This next chart from CoreLogic is perhaps more informative than the declines in percentage terms, looking at the dollar decline in median valuations in individual capital city and regional markets since prices peaked.
In Darwin, Sydney, Perth and Melbourne, and in regional Western Australia, the total dollar decline in median valuations in average terms stands head and shoulders above the rest, ranging from $71,404 in Melbourne to as high as $145,980 in Darwin.
“While a values percentage fall indicates how the market is fairing, seeing the actual value of the declines is a stark reminder of the actual losses,” said Cameron Kusher, Research Analyst at CoreLogic.
“While the recent declines in markets like Sydney and Melbourne can be put in context of the significant increases over recent years, this is little comfort for home owners that purchased at or near the peak of the market.”
Recent price falls in Sydney and Melbourne, and to a lesser degree other capital city markets, largely reflect the impact of tighter home loan lending standards, limiting investor activity and lowering the amount of finance that some borrowers can obtain, particularly those with already high debt levels as a proportion of household income.
In Perth and Darwin, where median values have fallen for a significantly longer period of time compared to the national average, previous weakness in commodity prices and a winding down of mining infrastructure investment have also played a key role, creating weaker economic conditions and reduced demand for housing.
Despite some tentative signs of a stabilisation in housing market conditions in recent data, Kusher believes the national price downturn is likely to continue in the months ahead.
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