Sydney housing values have fallen for the first time in 17 months, while Melbourne’s remain stalled, in the biggest sign yet the property market is levelling out.
The CoreLogic Home Value Index (HVI) showed Sydney dwelling values fell 0.1 per cent in February to record an overall median of $1,116,219.
This included a 0.3 per cent drop in unit values to a median of $831,793, while house values remained unchanged with a median value of $1,410,128.
CoreLogic Director of Research Tim Lawless said while the HVI posted a 17th consecutive monthly increase with a 0.6 per cent gain nationally, the pace of growth has trended downwards since April 2021.
February’s 0.6 per cent rise is the lowest growth since October 2020 and is down from a peak of 2.8 per cent in March 2021.
“Sydney and Melbourne have shown the sharpest slowdown, with Sydney (-0.1 per cent) posting the first decline in housing values since September 2020, while Melbourne housing values were unchanged over the month, following similar results in December (-0.1 per cent) and January (+0.2 per cent),” Mr Lawless said.
“Conditions are easing less noticeably across the smaller capitals, especially Brisbane, Adelaide and Hobart, where housing values rose by more than 1 per cent in February.
“Similarly, regional markets have been somewhat insulated to slowing growth conditions, with five of the six rest-of-state regions continuing to record monthly gains in excess of 1.2 per cent.”
Brisbane has recorded the highest growth in the past few months with its dwelling values climbing 1.8 per cent in February and 7.2 per cent in the past three months.
Brisbane now has a median dwelling value of $722,433.
In Adelaide, housing values have climbed 6.4 per cent in the past three months, including 1.5 per cent in February to a median of $593, 883.
Hobart recorded 1.2 per cent growth in February, while Darwin and Canberra followed with 0.4 per cent and Perth saw a 0.3 per cent lift in property values.
Mr Lawless said regional Australia continued to recorded a higher rate of growth than the capital cities. Housing values lifted 1.6 per cent across the combined regional areas in February, while the combined capital cities recorded a 0.3 per cent increase.
Although the rolling quarterly rate of value growth remains rapid across regional Australia, conditions have eased from a recent peak of 6.4 per cent over the December quarter and is down from a cyclical peak of 6.6 per cent recorded in April last year.
“Regional housing markets aren’t immune from the higher cost of debt as fixed-term mortgage rates rise,” Mr Lawless said.
“These markets are also increasingly impacted by worsening affordability constraints as housing prices consistently outpace incomes.
However, demographic tailwinds, low inventory levels and ongoing demand for coastal or treechange housing options are continuing to support strong upwards price pressures across regional housing markets.”
Mr Lawless noted the slower growth in Australian housing values went beyond the expectation of an interest rate hike later this year.
“The pace of growth in housing values started to ease in April last year, when fixed-term mortgage rates began to face upwards pressure, fiscal support was expiring and housing affordability was becoming more stretched,” he said.
“With rising global uncertainty and the potential for weaker consumer sentiment amidst tighter monetary policy settings, the downside risk for housing markets has become more pronounced in recent months.”
Nationally the number of properties advertised in February was 13.3 per cent lower than the same time a year ago but cities such as Melbourne and Sydney have seen advertised stock levels return to more normal figures.
In Melbourne, advertised stock levels are now 5.5 per cent higher than a year ago and 4.7 per cent above the five-year average.
In Sydney, advertised stock levels are 6.3 per cent higher than last year but still 4.2 per cent below the five-year average.
“The cities where housing values are rising more rapidly continue to show a clear lack of available properties to purchase,” Mr Lawless said.
“Total listings across Brisbane and Adelaide remain more than 20 per cent lower than a year ago and more than 40 per cent below the previous five-year average.
“Similarly, the combined rest-of-state markets continue to see low advertised supply, 24.9 per cent below last year and almost 45 per cent below the five-year average.”