Over half way to the largest house price falls in 40 years
As housing price falls continue to spread to more and more markets across the nation, it often feels like not a week goes by without a major bank or prominent analyst revising expected price falls upward. As of the latest data from Cotality, capital city housing prices (5 largest capitals) have dropped by 5.7%, with The post Over half way to the largest house price falls in 40 years appeared…
In a recent analysis, it has been revealed that housing prices across Australia's major capital cities have dropped by 5.7% as of the latest data from Cotality. Sydney and Melbourne have experienced the largest declines, with prices falling by 8.1% and 7.2% respectively. Other cities, including Adelaide and Brisbane, have seen smaller decreases, down by 2.8% and 3.7% respectively.
When comparing these figures to the largest housing price falls in the past 36 years, the current decline of 5.7% places us at nearly two-thirds of the way to the all-time high of 8.6% that occurred between October 2017 and May 2019.
According to Christopher Joye, a Coolabah Capital Portfolio Manager, the largest falls in prices at a five-capital-city level occurred between October 2017 and May 2019. This serves as a reminder that while housing price falls continue to spread across the nation, differences in performance between individual markets are significant.
For instance, Sydney's largest price correction took place between June 2017 and May 2019, with a 12.9% drop in dwelling prices. In comparison, Melbourne's worst cycle was between November 2017 and May 2019, with prices falling by 9.7%. Brisbane experienced its poorest performance since 1990 between April 2010 and June 2012, with prices down by 9.9%.
Adelaide's largest price fall in a previously assessed cycle was 5.8%, occurring between July 2010 and November 2012.
The current situation is further complicated by speculation about potential rate rises from the Reserve Bank and concerns over global energy supplies. There are fears that three more 0.25% rate increases could be on the horizon, adding to the uncertainty surrounding the market's future. Despite this, policymakers have historically chosen to support the market, often intervening as housing prices fell.
In the last 36 years, the two largest declines in capital city prices occurred shortly after the 2019 election, resulting in a more favorable political environment for property investors. In addition, the RBA's rate cuts during this period also played a role in propelling the market back to health.
Written by urgent.news from MacroBusiness's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
