The national housing market had its largest drop in value since the Global Financial Crisis (GFC) and first dip of any kind in 2018 according to new data from a leading industry watcher.<\/p>\n
CoreLogic’s Home Value Index for December found that national prices were down 5.3 per cent compared with the previous year, and were down 1.1 per cent on a month ago.<\/p>\n
The 2022 fall was the largest since 2008 when the GFC wiped 6.4 per cent from home values and follows three consecutive years of growth.<\/p>\n
The slowed growth and eventual decline started from a peak in early May.<\/p>\n
The inflection point coincided with a string of eight straight interest rate rises from the Reserve Bank of Australia (RBA) that started in May and lifted the cash rate from 0.1 per cent to 3.1 per cent.<\/p>\n
CoreLogic research director Tim Lawless said 2022 had been a year of contrasts, with four months of rapid growth to start the year ahead of rate rises that led to the downswing.<\/p>\n
“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen 8.2 per cent, folliwing a dramatic 28.9 per cent rise in values through the upswing.”<\/p>\n
But Mr Lawless said results were mixed across housing markets, with higher-end properties holding their value better in recent months despite a general downward trend.<\/p>\n
“The more expensive end of the market tends to lead the cycles, both through the upswing and the downturn. Importantly, recent months have seen some cities recording less of a performance gap between the broad value-based cohorts.<\/p>\n
“Sydney is a good example, where upper quartile house values actually fell at a slower pace than values across the lower quartile and broad middle of the market through the final quarter of the year.”<\/p>\n
Regional prices were steady across Australia throughout the year, though a drop in Victoria (1.3 per cent) and New South Wales offset gains in other states.<\/p>\n
Regional markets remained 32.3 per cent above their pre-COVID levels of March 2020.<\/p>\n
The report also found that the hit to prices had made vendors more reluctant to test the market, with supply rates down 19 per cent on the five-year average for the four weeks leading to Christmas.<\/p>\n
“The balance between the flow of new listings and number of home sales will be a key trend to watch through early 2023,” Mr Lawless said.<\/p>\n
“We typically see a seasonal surge in the number of new listings added to the market from early February through to Easter.<\/p>\n
“If this seasonal pattern plays out over the coming months against the backdrop of higher interest rates and a further drop in buying activity, we could see housing prices responding negatively as advertised supply levels rise and vendors are forced to discount their prices more substantially.”<\/p>\n","protected":false},"excerpt":{"rendered":"
The national housing market had its largest drop in value since the Global Financial Crisis (GFC) and first dip of any kind in 2018 according to new data from a leading industry watcher. CoreLogic’s Home Value Index for December found that national prices were down 5.3 per cent compared with the previous year, and were […]<\/p>\n