The housing market downturn has picked up speed with national home prices sinking to levels not seen in more than two years, new figures show.
Nationally, home values fell by 1 per cent in the first month of the year for a year-on-year decline of 6.1 per cent, CoreLogic’s January home value index revealed.
The national index has fallen over 13 of the past 15 months, with national dwelling values now back to levels last seen in October 2016.
The falls were largely driven by worsening conditions in Sydney and Melbourne where prices have fallen by at least 1 per cent on a monthly basis each month since November last year.
Sydney and Melbourne remain the nation’s “weakest” housing markets, with both cities experiencing an acceleration in the rate of decline over the past three months with prices dropping 4.5 per cent and 4 per cent respectively over the three months to the end of January.
Sydney home values are now back to levels last seen roughly two and half years ago in July 2016, CoreLogic said.
In Melbourne, which peaked in November 2017, four months later than Sydney, home values are back to January 2017 levels.
Weaker housing market conditions are evident across most of the capital cities, with only Hobart and Canberra seeing a rise in home values over the past three months.
Pace of falls accelerates, downturn broadens
The housing downturn has “accelerated sharply” in recent months, investment firm UBS said, with home prices falling at the same rate as during the global financial crisis in 2008, and equal to the rate of declines seen during the 1982/3 recession 36 years ago.
Home sales are at a 21 year low, with UBS describing the out look as “very negative” for renovations.
The downturn in house prices “continues to broaden,” UBS said.
Sydney leads the falls with prices down by 9.7 per cent year-on-year, followed by Melbourne where prices are down 8.3 per cent year-on-year.
Prices have plateaued in Brisbane, with zero per cent growth year-on-year, and 0.9 per cent in Adelaide. Perth is down 5.6 per cent and Darwin is down 3.5 per cent.
Home prices are up 3.8 per cent and 7.4 per cent year-on-year in Canberra and Hobart respectively.
Regional market loses steam
Regional property markets streaked ahead in 2018, but the new figures show they aren’t immune to worsening conditions.
“While values aren’t falling across every broad region of the country, it’s clear that even within the areas where values are rising, the market has lost steam,” CoreLogic said.
The only regions where the annual change in dwelling values has improved are Darwin, where the annual rate of decline has eased from -9.7 per cent a year ago to -3.5 per cent, regional Tasmania where the annual rate of growth has risen from 4.9 per cent a year ago to 9.2 per cent, and regional NT where the annual decline of -1 per cent has improved to an increase of 1.1 per cent, CoreLogic found.