Property downturn continues, but rate of decline softens again: CoreLogic

Property values across the country continued to decline over November, research from property data firm CoreLogic found, but there was a further ease in the speed of the declines.

Dwelling values (which incorporates both houses and units), contracted a further one per cent in November, driven by declines in Hobart (-2 per cent), Canberra (-1.2 per cent), and Sydney (-1 per cent).

Capital city housing markets declined -1.2 per cent, with Brisbane (-2.2 per cent), Hobart (-2 per cent) and Sydney (-1.5 per cent), feeling the declines the hardest.

Capital city units however dropped just -0.6 per cent. Hobart (-1.8 per cent), Sydney (-0.9 per cent) and Canberra (-0.8 per cent) the capital's the most affected in the unit market.

Declines however have continued to soften since August when the national index dropped by -1.6 per cent.

CoreLogic Research Director Tim Lawless said the easing in the rate of decline is mostly emanating from the Sydney and Melbourne markets, but is also evident across many of the smaller capitals and most regional markets. 

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 per cent. That has now reduced by a full percentage point to a decline of -1.3 per cent in November," Lawless said. 

"In July, Melbourne home values were down -1.5 per cent over the month, with the monthly decline almost halving last month to -0.8 per cent.

“The rate of decline has also eased across the ACT (from a -1.7% fall in August), and is no longer accelerating in Brisbane. Most of the broad rest-of-state markets have also seen the pace of declines decelerate."

Lawless said that it is possible we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls. He does however note that housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.

“There is still the possibility that the pace of declines could reaccelerate, especially if the current rate hiking cycle persists longer than expected.

"Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire."

Melbourne Market Snapshot

• Unit values across Melbourne dropped just -0.2 per cent across November, the lowest declines the Victorian capital has seen since May.
  
• It's stark comparison to the housing market, which dropped another -1 per cent.

• Unit values are now -4.1 per cent down over 2022, almost half the declines felt in the housing market, now -8.1 per cent since the turn of the year.
  
• The median Melbourne unit value is now $597,000, and houses $759,000.

Sydney Market Snapshot

• Unit values across Sydney dropped just -0.9 per cent across November, the third highest of all the capital city markets.
  
• Sydney houses dropped another -1.5 per cent in November.

• Unit values are now -8.2 per cent down over 2022, which is double the declines in Melbourne. Houses in the Harbour capital are down -11.9 per cent in the same period.
  
• The median Sydney unit value is now $781,000, and houses $1,025,000.

Brisbane Market Snapshot

• Brisbane had the biggest divergence between the house and unit market in November
  
• Unit values across Brisbane dropped just -0.2 per cent across November, the third best performing unit market across the capitals.
  
• Brisbane houses however were the worst performer, down -2.2 per cent

• The Brisbane unit market has been one of the biggest success stories of 2022, bucking the trend of the downturn. Values are still 7.1 per cent higher than they were at the start of the year.
  
• The Brisbane house market has also remained resilient, just ticking into negative territory, down -0.8 per cent this year.
  
• The median Brisbane unit value is now $492,000, and houses $798,000.