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Home prices falling in 40 per cent of markets

Declining property prices have gathered steam with 40 per cent of house and unit markets falling in the past three months.

According to CoreLogic’s interactive Mapping the Market tool, 41.9 per cent of house and unit markets analysed in the June quarter declined in value, up from 23.6 per cent in the first quarter of 2022.

CoreLogic Economist Kaytlin Ezzy said the latest data showed a significant increase in the proportion of declining markets compared to March when values were falling predominantly in Sydney and Melbourne.

“This analysis captures two of the three recent rate hikes so it’s not surprising to see the added downward pressure has had a broader impact on the housing market,” Ms Ezzy said.

“Signs of a slowdown and falls in value were already evident before the rate rises, but are now becoming more widespread across Sydney and Melbourne, and beginning to impact the more expensive areas of Brisbane, Canberra and Hobart.

“Historically, premium suburbs are more volatile than the more affordable areas, values shoot up much faster during an upturn, but are among the first to fall during a declining market.”

Property prices fell 0.2 per cent on a national level during the previous quarter, while Sydney values decreased 3 per cent according to CoreLogic.

Although 81.1 per cent of house markets analysed recorded a fall in values over the three months to June, three out of four suburbs still have a median house value of more than $1 million with no house markets under $500,000 across Sydney.

Ms Ezzy said due to relative affordability, Sydney’s unit market was slightly more resilient, with values dropping 2.1 per cent over the quarter.

Almost two-thirds of the Sydney unit markets analysed had a median value of between $500,000 and $1 million, while 30.6 per cent recorded a median above $1 million. Only 19 areas recorded a median value below $500,000.

The slowdown across Melbourne’s inner east has become more widespread, with 80 per cent of the city’s house markets falling in value over the quarter while almost 60 per cent of unit markets recorded a fall, Ms Ezzy said.

“Units nationally have proven to be slightly more resilient than house markets, which largely comes down to affordability,” she said.

“While units in some of those more expensive inner-city areas are starting to decline nationally, fewer unit markets fell over the quarter than houses.”

Ms Ezzy said Brisbane growth conditions remained largely positive, with just 11.6 per cent of markets recording a quarterly fall in values.

Of the suburbs analysed, 120 (35.7 per cent) recorded a median house value in excess of $1 million, up from 33.2 per cent in the March quarter.

Only 10 of Brisbane’s 180 unit markets declined in value over the quarter, with four suburbs in the Logan-Beaudesert region among the country’s most affordable, recording median values below $250,000.

Adelaide had the most robust quarterly growth in house values amongst the capitals at 5.1 per cent .

Henley Beach South was the only house market to record a drop in value, down 1 per cent.

“Adelaide has recorded the strongest growth in the past quarter, but has shown an easing in the quarterly rate of growth since February this year,” Ms Ezzy said.

“A quarter of Adelaide’s house markets are recording a median of $1 million or more, yet despite its recent growth, it also remains relatively affordable with a number of unit and house markets still recording a median of less than $500,000.”

After WA’s state border opened in March, Perth’s house values surged 2.2 per cent over the three months to June, with fewer than 20 markets recording a decline in values in the June quarter.

Perth housing values remained the lowest of any capital city.

Hobart’s median house value declined 0.5 per cent to $796,863 in the June quarter with more than half the markets analysed recording quarterly falls, while only three unit markets fell in value over the same period.

In Darwin, house values increased 3 per cent in the June quarter, taking the city’s median value to $588,928, with only two suburbs recording a quarterly decline in house values.

Unit values increased 1 per cent in the same period, taking the median unit value to $378,325.

Canberra’s median house value increased 1.2 per cent in the June quarter to $1,065,317, leaving only two of the 83 suburbs analysed with a median house value less than $750,000.

The median unit value in the nation’s capital increased 2.6 per cent in the June quarter to $629,531.

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.