Invest
Falls in expensive home values bad news for entire market
Property price softening has largely bypassed cheap and middle-tier homes while denting the top end of the market, presaging a wider market downturn, new numbers suggest.
Falls in expensive home values bad news for entire market
Property price softening has largely bypassed cheap and middle-tier homes while denting the top end of the market, presaging a wider market downturn, new numbers suggest.
According to CoreLogic’s latest research, the most expensive end of the market saw values fall by 1.1 per cent in the March quarter and this could portent a wider downturn.
“Particularly within the housing markets which have recorded the strongest value growth over recent years (Sydney and Melbourne) that growth across the premium housing sector is slowing more rapidly than the other sectors,” research analyst at CoreLogic Cameron Kusher said.
“This mirrors the experience in other recent housing market slowdowns/downturns whereby it is the most expensive suburbs which slow first and have experienced the larger downturns.”
The cheapest 25 per cent of houses saw values increase by 0.7 per cent in the March quarter, in line with the annual 0.7 per cent growth.
At the same time, the middle 50 per cent of the market saw property values grow by 0.3 per cent, well below the 2.7 per cent average growth over the last year.
The top quarter of properties saw an annual value increase of 0.1 per cent, compared with the quarterly fall of 1.1 per cent.
“With value growth slowing, the trends of the past are being repeated with the most expensive properties experiencing the most rapid slowdown in value growth,” Mr Kusher said.
“During the growth phase, it was these same properties that were also recording the highest rate of capital gain.”
Sydney’s most expensive properties saw the largest value fall (-5.7 per cent) followed by a middle market softening of -0.9 per cent. Following the national trend, the cheapest properties saw moderate 0.6 per cent in the March quarter.
Regional NSW, on the other hand, saw growth among all three tiers, with the largest increase (5.6 per cent) experienced in the middle market.
The same trend occurred in regional Victoria.
However, Mr Kusher noted, “Hobart and regional Tasmania are seeing values grow at a rapid pace and it is interesting to note that the growth in the market is being led by more affordable properties with the relatively expensive housing lagging in terms of growth.
“In Perth and Darwin where the housing markets have been in a downturn for many years different trends are emerging.
“Perth is showing more signs of a recovery than Darwin and it appears the improvement in Perth is being driven by premium housing.”
In comparison, Darwin is exhibiting few signs of an improvement, Mr Kusher said, observing the 9 per cent fall in value among the most expensive properties, followed by an 8.2 per cent value fall in the middle tier and a 6.8 per cent drop in the cheapest property values.
Property
3 reasons why Australia’s booming housing market won’t last long-term
Despite Australia’s property market growing at a pace not seen for three decades, a leading economist suggests there are warning signs that the property boom could be short-lived. ...Read more
Property
FHB surge as ‘it’s now cheaper to buy than rent’
Record-low interest rates mean that it is now cheaper to buy than rent, with first home buyers taking advantage, doubling their participation in the market, a big four bank CEO has said. ...Read more
Property
New home sales continue to soar in March
A strong level of building activity is expected in 2021 and 2022, given a strong spike in home sales during the year to March. ...Read more
Property
HomeBuilder extension announced
One of the government’s most successful schemes, HomeBuilder, has been extended, bringing the total level of expected government support for the construction sector to $2.5 billion. ...Read more
Property
Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has said. ...Read more
Property
House prices to grow by 25% over 3 years
New research is predicting a large gain in property prices of around 25 per cent through to the end of 2023, driven mainly by low interest rates. ...Read more
Property
Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday rental code of conduct has been pushed back by three months. ...Read more
Property
Melbourne becomes Australia’s 2nd most affordable rental market
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Aus...Read more
Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
Property
3 reasons why Australia’s booming housing market won’t last long-term
Despite Australia’s property market growing at a pace not seen for three decades, a leading economist suggests there are warning signs that the property boom could be short-lived. ...Read more
Property
FHB surge as ‘it’s now cheaper to buy than rent’
Record-low interest rates mean that it is now cheaper to buy than rent, with first home buyers taking advantage, doubling their participation in the market, a big four bank CEO has said. ...Read more
Property
New home sales continue to soar in March
A strong level of building activity is expected in 2021 and 2022, given a strong spike in home sales during the year to March. ...Read more
Property
HomeBuilder extension announced
One of the government’s most successful schemes, HomeBuilder, has been extended, bringing the total level of expected government support for the construction sector to $2.5 billion. ...Read more
Property
Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has said. ...Read more
Property
House prices to grow by 25% over 3 years
New research is predicting a large gain in property prices of around 25 per cent through to the end of 2023, driven mainly by low interest rates. ...Read more
Property
Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday rental code of conduct has been pushed back by three months. ...Read more
Property
Melbourne becomes Australia’s 2nd most affordable rental market
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Aus...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
