Advertisement

Biggest monthly hit to home values since GFC

Home prices in Sydney have plunged 9.5 per cent since the market peaked in July 2017.

Home prices in Sydney have plunged 9.5 per cent since the market peaked in July 2017. Photo: Getty

National home values are plummeting at a pace not seen since the Global Financial Crisis, led by Sydney where the peak-to-trough price decline is set to eclipse a 30-year record.

National home values sunk 0.7 per cent over the month of November, the weakest month-on-month change in dwelling values since the GFC a decade ago, new figures from property data firm CoreLogic show.

The falls were largely led by ongoing price declines in the nation’s two most populous housing markets, Sydney and Melbourne, where prices fell 1.4 per cent and 1 per cent respectively over the last month.

Home prices in Sydney are down 9.5 per cent since the market peaked in July 2017, with the harbour city poised to plunge past the previous record peak-to-trough decline set during the last recession when home values fell 9.6 per cent between 1989 and 1991.

Home prices in Melbourne peaked in November 2017, four months later than Sydney, and have fallen by 5.8 per cent over the past 12 months.

Aggregated median capital city dwelling (house and unit) values. Source: CoreLogic

The declines come after years of skyrocketing prices in the two major cities, with Sydney and Melbourne home values soaring by 64.4 per cent and 56.4 per cent over the five years to January 2018.

The two major markets are largely responsible for the falls in national home values, according to CoreLogic head of research Tim Lawless.

“The downwards pressure on national dwelling values is largely confined to Sydney and Melbourne which together, comprise approximately 55 per cent of the value of Australia’s housing asset class,” he said.

Discount luxury: Expensive homes driving falls

The premium end of the housing market is continuing to lead price declines.

Sydney’s most expensive quarter of properties has recorded a 9.3 per cent drop in values over the past year while the most affordable quarter is down a lower 5.7 per cent, according to CoreLogic.

In Melbourne, “premium” home values are down 9.9 per cent over the past year, while the most affordable quarter of the market has seen prices rise 1.7 per cent.

Australian housing markets “increasingly diverse”

Annual change in dwelling values as at November 30, 2018. Source: CoreLogic

Although the weaker housing market conditions in Sydney and Melbourne are under the spotlight, conditions across Australian housing markets are “increasingly diverse”, Mr Lawless said.

“Dwelling values are trending higher across five of the eight capital cities, albeit at a relatively slow pace compared with the previous surge in Sydney and Melbourne,” he said.

“Hobart and regional Tasmania continue to be the standouts for capital gain, with values up 1.7 per cent across both regions over the past three months.”

Stay informed, daily
A FREE subscription to The New Daily arrives every morning and evening.
The New Daily is a trusted source of national news and information and is provided free for all Australians. Read our editorial charter
Copyright © 2024 The New Daily.
All rights reserved.