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Expensive homes leading value decline

Value decline, arrow down, expensive homes

The softening property market is being led by falls at the top end of the spectrum, with the most expensive seeing falls of 5 per cent.

The latest data from property research house CoreLogic has revealed the most expensive 10 per cent of properties around Australia have seen values fall by 5 per cent in the last year.

At the same time, the most affordable 10 per cent have seen value rise 1.8 per cent.

“While most people are aware of differing city-to-city value changes within a geography, properties within different value bands can also see quite different changes in values,” research analyst Cameron Kusher said.

“Overwhelmingly, the data shows long-term values at the more affordable end of the housing market increased at a faster pace than the most expensive properties and highlights that when there is a housing market downturn lower-valued properties typically experience much more moderate declines than the higher valued housing stock.

“With values now falling in Sydney and Melbourne, much greater value falls are already being experienced at the top-end of the market and this trend is expected to continue as values continue to recede.”

CoreLogic found dwelling values have fallen 1.1 per cent across the combined capital cities in the last year. Capital city properties in the most expensive decile, however, saw falls of 5.7 per cent, while the cheapest 10 per cent had values increase 1.3 per cent.

This isn’t abnormal, CoreLogic added, noting that in softening periods, reductions in value are generally greater at the more expensive end of the spectrum.

Mr Kusher added that the opposite tends to be the case when property values are increasing.

“During the growth phase … the most expensive properties have generally outperformed the broader market,” he said.

Regionally, values increased 2.2 per cent with the most expensive growing 2.1 per cent and the cheapest 4.9 per cent.

Again, this isn’t unusual, CoreLogic said. The most affordable decile has outperformed average and expensive properties in terms of growth in recent years, and hasn’t experienced an annual decline in value for 20 years.

Expensive homes leading value decline
Value decline, arrow down, expensive homes
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