August posts historically poor price performance

The national housing market suffered its largest monthly decline in almost 40 years in August according to latest property research.

CoreLogic’s Home Value Index declined by 1.6 per cent compared with the previous month – the largest month-on-month downturn since 1983.

Regional Australia caught up with the capital cities on the value slide, falling 1.5 per cent during August.

“The largest falls in regional home values are emanating from the commutable lifestyle hubs where housing values had surged prior to the recent rate hikes,” CoreLogic research director Tim Lawless said.

Regional prices are fresh off a period of unprecedented growth, after rising by more than 40 per cent from March 2020 to January this year.

Mr Lawless expected the current downturn to continue at least until the rest of this year: “It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” he said.

“From current levels, interest rates are likely to increase by at least another 75 basis points and there is a good chance advertised stock levels will accumulate through the spring selling season, providing more choice for buyers and adding further downwards pressure on housing values.

“The flow of new listings this spring season may not be quite as active with the housing downturn dissuading some prospective vendors, but we are likely to see more listings added to the market than in winter.

“At the same time we are expecting to see less buying activity as higher interest rates and low sentiment continue to weigh on demand. Should this scenario play out, the net result will be an accumulation of advertised supply that could further weigh down values.”