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Home price falls stabilise in October

National home prices recorded a small decline in October as values continue to stabilise.

According to the PropTrack Home Price Index, national values declined just 0.06 per cent, the smallest fall since national home prices peaked in March 2022.

The widespread price falls seen across capital cities in September softened and, in some cases, reversed. 

PropTrack Senior Economist, Eleanor Creagh said rising interest rates have quickly rebalanced the housing market from last year’s extreme growth. 

“Prices have fallen from their peak nationally and were down 0.06 per cent in October,” Ms Creagh said.

“However, the pace of price falls has slowed from the faster falls seen earlier this year when interest rates first started rising.”

In Sydney, home prices fell 0.21 per cent in October and are now down 5.82 per cent over the past year. 

“Prices have fallen persistently since March this year, with Sydney seeing the greatest falls of any market,” Ms Creagh said.

“Higher interest rates are affecting higher-priced regions most, with Sydney feeling these effects.”

Home prices in Melbourne bucked their recent trend of declines and were flat (0.02 per cent) in October, Ms Creagh said.

“Melbourne home price falls stalled in October, reversing recent declines to now sit 3.45 per cent below their October 2021 level,” she said.

“Prices are now 4.75 per cent below their recent peak.”

Prices recorded a slight fall (-0.09 per cent) in Brisbane in October and are 2.77 per cent below their peak recorded in April 2022, according to Ms Creagh.

“Prices are up just 7.51 per cent over the past year after recording annual growth rates above 30 per cent in early 2022 as the city benefited from the lifestyle and affordability trends that boosted the regions from the onset of the pandemic,” she said.

Home prices in Darwin (0.21 per cent) recorded the strongest growth out of the capital cities.

Adelaide (0.12 per cent) and Perth (0.11 per cent) were the only other capital cities to record any meaningful positive growth in the month, with home prices in Adelaide now at a fresh peak.

“South Australia continues to defy the downturn, with prices rising 0.12 per cent to a fresh peak in Adelaide,” Ms Creagh said.

“Demand for more affordable regions and larger homes has buoyed the Adelaide market and is likely to continue to do so.

“Adelaide, the strongest performing capital city market over the past year, saw home prices rise 0.12 per cent to a fresh peak in October.”

Home prices in Hobart led the declines in October, falling 0.46 per cent to sit 2.68 per cent below their peak in April. 

However, prices remain 2.95 per cent higher than levels seen in October last year and are up 44.4 per cent compared to pre-pandemic levels in March 2020.

Prices in Canberra fell another 0.37 per cent in October, the second largest price fall out of the capital cities. 

Values are now 3.92 per cent below their peak in March but remain 0.94 per cent higher than levels seen in October last year. 

Regional prices continue to hold up better than capital cities, rising 0.06 per cent in October.

Ms Creagh said sellers are adapting to market conditions, while buyers are taking advantage of the less competitive conditions relative to spring last year. 

“The RBA appears done with frontloading the tightening cycle, slowing the pace of its hikes. This may give prospective buyers a confidence boost,” she said.

“With further rises on the horizon, borrowing costs will increase and maximum borrowing capacities will reduce, weighing on prices. 

“This will be offset by tight rental markets, rebounding migration, low unemployment, and housing supply pressures.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.