Sydney and Melbourne home prices fell again in early November

Ongoing falls. Ben Birchall/PA Images via Getty Images
  • Home prices in Australia have fallen for 13 consecutive months and early indications from November suggest it could soon be 14.
  • Values continued to edge lower in Sydney, Melbourne and Perth last week, extending the falls over the past year. In contrast, values in Adelaide and Brisbane were flat to higher.
  • A variety of factors have contributed to the recent divergence in price trends across the country, and look set to continue for some time yet.

Australian home prices have fallen in each of the past 13 months. The early indications from November suggest it could soon be 14.

According to CoreLogic, the median home price across Australia’s five mainland state capitals — Sydney, Melbourne, Brisbane, Adelaide and Perth — fell by 0.1% last week in average weighted terms, leaving the decline over the past four weeks, and year-to-date, at 0.5% and 4.3% respectively.


The recent trends were maintained in the latest data — prices fell in Sydney, Melbourne and Perth masking stronger outcomes in Brisbane and Adelaide.

Sydney’s median price fell by 0.2%, extending its decline over the past month to 0.7%. Since the start of the year, values in Australia’s most expensive housing market have fallen 6%, and by 7.5% over the past year.

Median prices fell by 0.1% apiece in Melbourne and Perth during the week, leaving declines in both cities down 0.6% and 0.7% since early October.

Longer-term, Melbourne’s median value has slid 4.8% in 2018, also the decline registered over the past 12 months. Melbourne’s downturn in now a year old, and seemingly set to extend given continued weakness in auction clearance rates.
Perth’s median prices has fallen by a smaller 3.1% this year, and by a slightly larger 3.4% since early November a year ago.

While values in those markets continue to fall at around the same margin, prices in Brisbane and Adelaide were firmer.

In Brisbane, Australia’s third-largest capital city behind Sydney and Perth, prices were unchanged over both the past week and month, leaving the increase so far this year at 0.3%.

As has been the case for some time, Adelaide values managed to buck the broader trend, lifting by 0.1% last week and 0.2% from a month earlier.

Year-to-date, values in Adelaide have risen by 1.1%, the fastest increase of any mainland state capital. Auction clearance rates in Adelaide have also been stronger recently than in other parts of the country.

Mirroring the performance seen this year, Brisbane and Adelaide are the only capitals of those monitored in this data set that have seen prices increase over the past year, lifting by 0.3% and 1.8% respectively.

While Perth’s downturn has been influenced by local economic factors, and has been significantly longer in duration compared to other markets, the recent divergence in values between Sydney and Melbourne compared to Brisbane and Adelaide largely reflects the impact of tighter lending standards towards high debt-to-income borrowers.

This partially explain why markets where property values are high as a multiple of household incomes are struggling compared to those where values are more affordable.

Other factors contributing to the recent divergence include less activity from local and foreign investors in Sydney and Melbourne and mixed sentiment towards the outlook for prices in individual cities.

Stock levels are also another.

According to CoreLogic, properties listed for sale across Australia’s capitals stood at 125,426 last week, up 10.2% from the same period a year ago.

The level of listings is currently the highest since late 2012, also a period when national price measures were falling.


In Sydney and Melbourne, total listings have surged by 17.1% and 19.1% respectively over this period, significantly faster, or in complete contrast in some instances, from what’s been seen across the smaller capitals.

Ballooning stock levels across the country has largely been driven by softer demand with new listings — defined as those properties that have not been put up for sale within the past six months — falling 3.3% year-on-year to 30,477 last week.


The increase in total listings, despite fewer properties being put up for sale, largely reflects that it’s now taking significantly longer for the average home to sell in Sydney and Melbourne compared to periods in the past.

With supply ample and demand soft, it also helps explain why prices in these cities are falling faster than the national average.

Even with a recent decline in building approvals there’s an enormous supply of new homes being built in these cities, especially apartments, hinting that downward pressure on prices for high-density homes could intensify further in the period ahead.

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