Aussie house prices falls are worse than thought

Australia's housing market is experiencing a more severe downturn than initially anticipated, according to revisions by Cotality. The company's dwelling values index has dropped by 3.8% over the last quarter at a national level, but the overall decline has been revised to 6.4%, which is significantly worse than the 6.0% suggested by the index.

The biggest declines have been seen in Perth and Brisbane, with values falling by 6.0% and 5.4% respectively. A staggering 97% of capital city suburbs have experienced a drop in value over the past three months, indicating the widespread nature of this housing crisis.

Housing turnover has also fallen sharply, down 19.1% year-on-year to be 13.3% below the five-year average, which could have broader economic implications. The number of home sales is down, and the rate of sales has fallen faster than the rate of new listings entering the market. As a result, listed homes are taking significantly longer to sell, with a median time of 39 days compared to 23 days a year ago.

This sharp decline in housing prices, combined with the Reserve Bank of Australia's recent rate hike and expectations of further increases, could lead to one of the largest price crashes in Australian history. Analysts warn that this could follow a similar pattern to what has been seen in New Zealand and Canada, with a two-year sharp decline followed by years of stagnation. The fear of overpaying for homes could replace the current Fear of Missing Out (FOMO) among buyers.