Australia’s housing correction marks its twelve month anniversary with values down 2.7% since peaking in September last year
The CoreLogic September home value index results released today reported that half of Australia’s capital cities saw values track lower over the past twelve months. The remaining capital cities, as well as regional markets, have recorded a slowdown in the annual pace of growth as the housing downturn becomes more broadly based.
The Australian housing market continued to weaken in September, with national dwelling values falling 0.5% over the month, marking twelve months of consistently falling values across CoreLogic’s national hedonic home value index. Dwelling values tracked lower across five of the eight capital cities in September while five of the seven ‘rest of state’ regions recorded a fall in values over the month.
Since the national index peaked twelve months ago, dwelling values have fallen by 2.7%; hardly a crash, and a slower rate of decline relative to the previous housing market downturn (Jun 2010 to Feb 2012) when national dwelling values fell by 3.0% over the first twelve months, declining 6.5% from peak to trough.
CoreLogic head of research Tim Lawless said, “While the housing market downturn is well entrenched across Darwin and Perth where dwelling values remain 22.1% and 13.2% lower relative to their 2014 peak, Sydney and Melbourne are now the primary drag on the national housing market performance.
“We’ve seen Sydney dwelling values drop 6.1% over the past twelve months and Melbourne values are 3.4% lower. Not only are these amongst the largest annual falls across the capital cities, but considering Sydney and Melbourne comprise approximately 60% of the national value of housing, the weak conditions in these cities have a substantial drag down effect on the overall national housing market performance.”
Although dwelling values are still rising on an annual basis in Brisbane, Adelaide, Hobart and Canberra, the rate of capital gain has slowed noticeably in these regions. One year ago, the annual gain in Brisbane was tracking at 2.9% and has since slowed to just 0.8% over the past twelve months. Adelaide values were rising at the annual rate of 5.0% a year ago, slowing to 0.7%, while the annual growth rate has slowed from 14.3% in Hobart to 9.3% and Canberra has seen annual gains slide from 7.8% to 2.0%. The only capitals to see an improvement in the annual change in housing values were Perth and Darwin where the annual rate of decline has eased off.
Regional markets, where housing values have generally been more resilient to falls than in the capital cities, are now showing more challenging conditions. Despite regional Western Australia being the only ‘rest of state’ region to record a decline in dwelling values over the past twelve months, the September quarter saw values dropping in Regional NSW (-1.3%), Regional Vic (-0.2%), Regional Qld (-0.6%), Regional SA (-0.3%) and regional WA (-3.4%).