of PropTrack Home Price Index Home prices continued to fall nationally in August, with regional markets recording their biggest quarterly declines since 2011. The biggest declines continue in Sydney and Melbourne, where prices are now below the levels of a year ago.
Key highlights from the August 2022 report include:
- Australian house prices fell 0.39% in August and are now 2.7% below their March peak.
- Prices continued to fall in Sydney (-0.49%) and Melbourne (-0.47%). All capital markets are now below price peaks, with Sydney prices down -0.87% from last year, making it the only capital city to see a one-year decline.
- The South Australian region remains the only market to continue to see significant growth, reaching new price peaks. Adelaide, the last capital city to record price declines this year, is now the best performing market of the year.
- Total area area fell 0.34% in August and is now down 1.2% over the past three months, the biggest quarterly decline since 2011.
- Despite the recent decline, prices are still well above pre-pandemic levels. The province continues to climb nearly 50% since March 2020. Prices in the capital have risen by 26% over the same period he.
Domestic price decline continues
Domestic house prices continued to fall in August. Prices have fallen 2.7% from his March peak, making up for all of his gains in 2022, and he is down 1% year-to-date.
Rising interest rates and the expectation that they will continue to rise have pushed spread prices down across the country. House prices are expected to continue to fall from 2022 to 2023 as lower borrowing capacity is reflected in prices.
The pace of price declines so far is in line with our forecast of a 2% to 5% decline in domestic prices through 2022. PropTrack Real Estate Market Outlook for many.
Regions experience biggest quarterly decline since 2011
Rural areas saw a 1.2% price decline over the past three months, the largest in a decade. However, the region’s inflation rate is stronger than in the capital, rising by 12.6% over the year compared to his 2.7% in the capital.
The region is benefiting from relative affordability post-pandemic and changing preferences for lifestyle locations and larger homes. It’s likewise buffering the region from the biggest price drop to date.
Prices in Sydney are below levels of a year ago
Sydney and Melbourne continued to see the biggest price drops, with another drop of around 0.5% in August.
Prices in Sydney are now below where they were a year ago, and prices in Melbourne are unchanged. Prices have fallen 4.8% in Sydney and 4.3% in Melbourne from peaks earlier this year.
There is a clear trend across the country, with the highest prices declining fastest. Uncertainty about borrowing costs appears to be increasing in the regions with the largest mortgage volumes.
Adelaide prices fell for the first time this year. This is the last capital to record a price drop in 2022. However, Adelaide is now the best performing capital market over the past year (up 18.6%), overtaking Brisbane (up 16.6%). ). Benefiting from many of the same lifestyle and affordability trends that have boosted the region since the outbreak of the pandemic, these regions remain strong metropolitan markets.
The South Australia region is the only market to continue both strong growth and a new price peak in August.
House prices fell 0.44% in August, while units fell just 0.16%. The post-pandemic period has been marked by a desire for more space, with home prices (up 6% over the year) outstripping units (up just 2.2%). However, home price growth has slowed very quickly this year.
The region with the highest demand in the country achieved 20% growth
The regions of South East Queensland, Southern Australia and Rural New South Wales topped the country with growth of over 20% over the past year. It is clear that areas around South Australia and Brisbane continue to benefit from demographic shifts, with Australians taking advantage of remote work and more affordable prices in these locations.
Looking at the capital as a whole, the perimeter of the city clearly performs better. With an increased willingness to pay for larger homes and a reduced need to commute, these neighborhoods have performed strongly since the outbreak of the pandemic.
Domestic prices have continued to fall since March, and price declines are now affecting all capital cities. So far, prices have slumped 2.7% from his peak, with Sydney and Melbourne down more than 4%. Notably, Sydney prices are below what he was a year ago, and Melbourne prices are unchanged.
The national annual price increase rate is 5.4%, the lowest since December 2019.
The South Australian region is currently the only market to see both significant price increases and the setting of new price peaks. Adelaide is the last capital city to record price declines in 2022, the strongest in the past year.
Rising interest rates have been a dominant factor in falling home prices. The RBA has hiked rates at its fastest pace since his 1994, and more significant hikes are expected. This has severely constrained borrowing capacity and raised borrowing costs in all regions.
These interest rate effects will take time to fully affect prices, and will be dominated by the positive impact on demand from expected wage growth and increased immigration over the next year.
In other words, prices are expected to continue falling in 2022-2023.
The current pace of price declines is in line with expectations of a 2% to 5% decline nationwide through 2022. Sydney and Melbourne continue to see the biggest drops, with the biggest combined price drops expected in those markets.
The biggest drop is seen in Sydney on the impact of rate hikes.Photo: Getty
Similar to Brisbane and Adelaide, the regional market has continued to benefit from lifestyle and affordability preferences since the onset of the pandemic, so prices have not fallen as quickly. So far, we see these benefits mitigating the worst declines in these markets, but a reversal of the pandemic-induced shift in taste poses risks to these markets in the longer term. Brings
View July issue PropTrack Real Estate Market Outlook Learn more about the extent of price drops PropTrack expects across the country.
Rising borrowing costs are a strong price headwind, but real estate market fundamentals remain healthy. The Australian economy is doing well and unemployment has been low for nearly 50 years. This will accelerate wage growth and improve borrowing capacity. Increased investor activity and immigration could boost the market for large cities and units, which are currently undervalued relative to other property types.
As we have seen in recent months, the speed of interest rate rises and wage growth remain key unknowns for prices going forward.
* PropTrack Home Price Index It measures monthly changes in residential property prices across Australia and provides a current view of property market performance and trends. The PropTrack Home Price Index uses a hybrid methodology that combines repeat sales and hedonic regression. Repeat sales match resales of the same property, while hedonic regression estimates values based on those of similar properties. The hybrid model matches two of his properties of the same type within the same Australian Bureau of Statistics Statistical Area 1 (SA1) region and allows control for differences in property characteristics like hedonic regression. The PropTrack Home Price Index is a revised index whose entire historical history is updated monthly with current transaction information.
** This report is realestate.com.au Internal data and data provided by third parties, including state government agencies. At the time of publication. This report provides general information only and is not intended to constitute advice. When citing or referencing this report (or the findings or data contained therein) in a publication, please refer to the report as “PropTrack Home Price Index Report – August 2022”. look report Copyright and legal disclaimers.