Home Insights PropTrack Home Price Index – December 2022

PropTrack Home Price Index – December 2022

by admin
0 comment

of PropTrack Home Price Index show Domestic house prices continued to fall in December, falling 0.21% in a month.

Key highlights of the report include:

  • Australian house prices are now 4.25% lower than their peak and 2.29% lower than 12 months ago.
  • Total capital prices fell 0.22% in December, with declines recorded in all capital cities Darwin and Hobart.
  • The biggest monthly declines were seen in Canberra (-0.43%) and Melbourne (-0.34%). For Adelaide (-0.18%), this was his first post-COVID monthly price drop.
  • Regional price declines were more subdued, falling 0.17% nationally. The Queensland region experienced the largest decline (-0.33%), while the Western Australia, Northern Territory and South Australia regions hit new peaks, bucking the national trend.
  • Despite recent declines, home prices across the country remain 29% higher than pre-pandemic levels.

More expensive markets with bigger price drops

At the national level, property prices have fallen for the ninth straight month. The capital’s composite price fell 5.18% from its peak, while the regional composite price he fell 2.37%.

Prices are still trending downward, but the rate of decline has slowed in recent months. In part, this is likely due to the diminished scale of rate hikes he’s seen since October.

Unsurprisingly, the impact of rising interest rates on falling property prices is greater for more expensive markets and property types.

Aerial view of a typical Sydney suburb

The decline in house prices has been particularly steep in Sydney, the country’s most expensive market.Photo: Getty


Australia’s three most expensive capital cities – Sydney, Melbourne and Canberra – saw the steepest price declines in 2022. Conversely, price drops are smaller in the more affordable cities of Adelaide, Perth and Darwin.

Homes have also registered larger price declines compared to units. Nationwide, home prices are down 2.4%, while unit prices are down 1.72% over the past 12 months.

Canberra leads December price decline, Adelaide records first drop

Canberra recorded the biggest drop of any market in December, with prices down 0.43% in a month. Melbourne followed, with prices down her 0.34%.

Darwin was the best performing market in December with a 0.32% price gain, while Hobart also gained 0.11%. Despite monthly gains, prices in both markets are below the peak levels achieved earlier this year.

While property prices in most Australian capitals have fallen for more than half a year, Adelaide has bucked the trend until recently. However, in December the city recorded its first notable price drop, with values ​​falling 0.18% of his.

Despite the December decline, Adelaide house prices remain 9.63% higher than 12 months ago, the highest level of annual growth seen in any capital city.

In contrast, property prices in Sydney are 7.23% lower than 12 months ago, the steepest decline among the capitals, followed by Melbourne (-5.96%) and Canberra (-5.05%).

Performance mixed, but rural areas outperform

Regional markets have outperformed capital markets in all states over the last 12 months.

On a year-on-year basis, Australia’s combined regions saw house prices rise by 2.08%, while the combined capital region saw a 3.99% decline in the same period.

While home prices in the region have been rising for the past 12 months, they are not immune to rising interest rate pressures, with many regions recording price declines in recent months.

Victoria and New South Wales saw the biggest declines, with prices down 3.02% and 2.90% respectively from their highs.

In contrast, prices continued to rise in the regions of South Australia and Western Australia, reaching a new peak in December.

Several factors underpin the region’s outperformance. First is the relative affordability of the provinces compared to the capital. Many buyers looking for larger residences are dropping prices from the big cities and looking further afield.

The prevalence of remote and hybrid work practices has also enabled many buyers to live far away from their workplaces.

Shortage of supply is another factor that has supported real estate prices in the region. The total supply of real estate for sale in the local market has been steadily declining over the past decade, a trend accelerated by the pandemic due to a surge in demand for local living.

This has led to high buyer demand compared to the supply of real estate for sale in many markets that has underpinned price performance.

South Australia dominates the fastest growing region

Five of the top 10 fastest growing regions over the last 12 months are in South Australia. Adelaide was also the only capital city in the top ten.

The Barossa/York/Mid-North region topped the national list with 16% annual house price growth, followed by Adelaide North at 15%.

South Australia’s dominance marks a change from the trend seen just six months ago, when Queensland was the bulk of the high-growth region.

The relative affordability of South Australian property compared to other states is a factor here. South Australian buyers, on average, borrow less to make purchases, so the relative impact of rising interest rates has been muted compared to other markets.

The most expensive neighborhoods in every capital tend to be the more affordable neighborhoods, often further away from the central business districts. By contrast, the most expensive markets saw the biggest price drops, with Sydney’s Northern Beaches region recording the biggest drop of any capital region in the past 12 months.

Outlook

Interest rates rose for the eighth straight month in December, the fastest since the 1980s.

Just as interest rate cuts were the main driver of the surge in home prices seen in 2020-2021, rising interest rates were the main driver of the price drop in 2022.

By December, interest rates were at their highest in just over a decade, putting a heavy strain on borrowers.

Over the course of 2022, the average buyer’s borrowing power declined by about 25%, significantly impacting how much people could borrow.

Interest rates are likely at or near their peak, but the Reserve Bank suggests they could rise further in 2023.

However, when interest rates peak, prices may stabilize. Moreover, the combination of Australia’s growing population and the slowing pace of construction of new housing stock could cause price declines to bottom out.

* 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 – December 2022”. look report Copyright and legal disclaimers.

You may also like