Invest
Property prices fall for the first time in nearly a year
Australia’s property market fell by 0.4 per cent over the month of May, representing the first drop since June 2019, although it was not as severe as leading economists predicted.
Property prices fall for the first time in nearly a year
Australia’s property market fell by 0.4 per cent over the month of May, representing the first drop since June 2019, although it was not as severe as leading economists predicted.
According to the latest CoreLogic figures, five of the eight capital cities have experienced a price drop, although market conditions are returning to normal and seeing an increase in volume.
CoreLogic’s head of research, Tim Lawless, noted better than expected results as the national economy was battered by COVID-19’s impact.
“Considering the weak economic conditions associated with the pandemic, a fall of less than half a percent in housing values over the month shows the market has remained resilient to a material correction,” Mr Lawless explained.
“With restrictive policies being progressively lifted or relaxed, the downwards trajectory of housing values could be milder than first expected.”
Darwin was Australia’s most impacted city, falling by 1.4 per cent, while Australia’s second-largest market, Melbourne, fell by 0.9 per cent.
Sydney fell for the first time since the health pandemic began, falling by 0.4 per cent.
CoreLogic noted that it was the top of the market which is causing most of the overall falls in property values.
The most rapid decline in housing values is across the top quartile of the Melbourne and Sydney markets.
Melbourne’s most expensive quartile of the market recorded a 1.3 per cent drop in values over the month, compared with a 0.6 per cent fall across the broad “middle” of the market and a 0.3 per cent fall across the most affordable quartile.
Similarly, in Sydney, the top quartile was down 0.6 per cent, while the lower quartile posted a 0.1 per cent increase in values.
According to Mr Lawless, these were also the sectors of the market recording the most significant rise in values during the most recent growth phase. “Melbourne’s top quartile values are still 13.9 per cent higher than they were a year ago, while Sydney’s top quartile is up 16.5 per cent over the year.”
Despite these falls, Mr Lawless stated that the overall outlook is more positive than first expected, largely due to a shift in consumer sentiment.
“The reduction in values through May comes as transaction activity in the market shows more positive signs. The CoreLogic estimate of sales activity bounced back by 18.5 per cent in May after a (revised) drop of 33 per cent in April,” Mr Lawless said.
Regional markets have been more resilient to value falls, with the combined regional index holding firm through May.
Although some areas have avoided a reduction in values since March, every region has lost momentum and the longer-term outlook remains uncertain.
“Eventually, government stimulus will wind back and borrower repayment holidays will expire. In the absence of these policies, housing values could come under some additional downwards pressure if economic conditions haven’t picked up towards the end of the year,” the researcher explained.
RELATED ARTICLES
About the author
About the author
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Young buyers poised for a comeback as 5% First Home Guarantee takes effect
In a move set to reshape the Australian property landscape, the government’s revamped First Home Guarantee is poised to open the doors of homeownership to a new generation of young AustraliansRead more
Property
AFG Securities waives settlement fees for first-home buyers, signalling strategic shift
In a strategic move aimed at easing the financial burden on first-home buyers, AFG Securities has announced the elimination of settlement fees on select loans, potentially saving customers up to $699Read more
Property
From trust woes to wealth: Australian agencies' secret to boosting prices
In Australia’s residential market, trust is no longer a nice-to-have—it’s a pricing variable. Persistent distrust of real estate agents is depressing vendor outcomes and inviting regulatory heat, but ...Read more
Property
Reality check for first home buyers: Affordable suburbs with 5% deposit
In a significant development for Australian first home buyers, a new property search tool from Aussie Home Loans is set to transform the way prospective homeowners approach the market. As the Federal ...Read more
Property
Trust as a performance multiplier in Australia's real estate market
In Australia’s A$10–11 trillion housing market, trust is emerging as a crucial factor that sellers and agencies can no longer afford to overlook. Traditionally viewed as a soft metric, trust is now ...Read more
Property
LJ Hooker Lake Macquarie makes a splash with Belmont buy as real estate consolidation looms
LJ Hooker Lake Macquarie’s acquisition of the Belmont office, including its rent roll, is less about shopfronts and more about balance‑sheet resilience. In a market where listings ebb and flow with ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
