Australia’s housing market downturn looks like it’s slowing

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  • Home prices fell across most Australian mainland state capitals last week, although the pace of decline appears to be moderating a touch.
  • While total listings across the capitals have surged 9.8% from a year ago, new listings have fallen over the same period, reflecting that weaker market conditions are discouraging homeowners from selling.
  • Annual growth in listings in Sydney and Melbourne is now starting to slow, a factor that could act to support prices.

Home prices fell across most Australian mainland state capitals last week, although the pace of decline appears to be moderating a touch from the levels seen in recent months.

According to CoreLogic, the price declines were led by Perth where median prices fell by 0.4%, leaving the decline over the past month at 0.8%.

Elsewhere, prices slipped by 0.1% apiece in Sydney and Melbourne, extending the decline over the past four weeks in both cities at 0.5% and 0.6% respectively.

Adelaide’s median prices also fell by 1%, trimming gains in the city over the past month to 0.1%.

Brisbane managed to buck the broader trend with the median prices lifting by 0.1% over the week, the same gain recorded over the past month.


Combined, the median price across the mainland state capitals slipped by 0.1% over the week in average weighted terms, leaving the fall over the past month at 0.4%, smaller than the 0.6% drop seen in late October.

While still far too soon to call a start of a new trend, there’s tentative evidence emerging to suggest the pace of price declines is slowing, at least from a national perspective, despite ongoing declines in auction clearance rates.

“It is possible that the auction clearance rate will lose meaning as an indicator in a world where it takes much longer to secure mortgage financing than in the past,” says David Plank, Head of Australian Economics at the National Australia Bank.

“Indeed, the role of auctions may diminish sharply with the change being structural rather than the usual cyclical downturn which sees auctions lose favour in a weakening market.”

Year-to-date, Sydney’s median price has fallen 6.1%, the fastest of any mainland capital city over this period.

Median prices in Melbourne and Perth have also gone backwards this year, falling 4.9% and 3.5% respectively, a performance in stark contrast to Adelaide and Brisbane where values have increased 1% and 0.5% respectively over the same period.

Combined, the median price in these capitals has fallen 4.4% in average weighted terms this year, a result largely influenced by weakness in Sydney and Melbourne, home to around 40% of Australia’s housing stock and 60% of the nation’s housing wealth.

Like the year-to-date performance, similar price trends were also evident over the past year with Sydney, Melbourne and Perth’s median price slipping 7.4%, 4.9% and 3.8% respectively, masking gains of 1.6% and 0.4% in Adelaide and Perth.

Combined, the median price in the mainland state capitals has now fallen 5.1% over the past year.

While there are number of factors that have contributed to the national price downturn in the past year, a steep increase in property listings in Sydney and Melbourne, at a time when demand is being affected by souring sentiment and tightening lending standards, has meant that many vendors are having to lower their price expectations in order to secure a sale.

From a year ago, total listings in Sydney and Melbourne have increased by 16.7% and 17.8% respectively, largely explaining the 9.8% rise in nationwide listings seen over this period.

At 126,795, the number of total capital city listings is the highest since late 2012, another period when national price measures were falling.


The increase in stock sitting on the market reflects a softening in demand rather than surge in new listings which have actually fallen by 3.2% nationwide compared to the levels of a year earlier.

New listings, defined as properties that have not been put up for sale within the past six months by CoreLogic, have actually fallen by 8.2% and 3.2% respectively in Sydney and Melbourne over the past year, indicating that weak market conditions are discouraging homeowners from selling.

Unless demand weakens any further, the reduction in new listings could see total listing levels also start to normalise, a factor that could help to support prices should recent trends be maintained.

Year-on-year growth in listings in Sydney and Melbourne has already fallen from recent cyclical peaks, coinciding with the moderation in nominal prices declines seen in both cities in recent weeks.

One of many factors to keep an eye on in the period ahead.