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Prices have fallen in tandem with declining auction clearance rates. Picture: Robert Pozo A “perfect storm” of interest rate hikes, war abroad and controversial federal tax reforms has broadened previous weakness in Australia’s housing market into a wider downturn that is now touching nearly every suburb. New data shows what began as a slump confined to Sydney and Melbourne’s blue-chip enclaves has morphed into a bigger correction, ripping through working-class suburbs and coastal hubs alike.
The analysis of exclusive realestate.com.au figures revealed a staggering 82.2 per cent of suburbs nationwide recorded average drops in house values over the past three months. MORE: See the latest figures for NSW / Vic / Qld It marks the first full quarter of suburb-by-suburb market data since sweeping federal budget reforms hit the property sector in May, including caps on negative gearing. Just 10.6 per cent of suburbs eked out growth in house values, while 7.1 per cent recorded no change.
The past three month represent the first full quarter of sales results since the Labor government’s sweeping tax reforms in the May federal budget. Picture: Getty Images The pain isn’t limited to stand-alone houses. The unit market has been hammered just as hard, with valuations plummeting in 79.7 per cent of suburbs with available data.
About 14 per cent of unit markets nationwide recorded price gains, while 6.3 per cent flatlined. Industry insiders say the downturn wiped tens of thousands of dollars off backyard equity in a matter of weeks. Kent Lardner, research director at analytics group FoundIt, said the causes of the downturn could not be neatly packaged as simply due to interest rates, or government policy.
“It’s a perfect storm,” he said. The impact has differed widely across states: QUEENSLAND See the Queensland suburbs with the biggest rises, falls Queensland homeowners lost up to $244,000 in equity across the suburbs hardest hit by the downturn. The realestate.com.au data showed nine out of 10 suburbs across the state recorded home value falls in the September quarter.
“The impact on prices can be connected to the budget,” said Ray White economist Atom Go Tian. “The unattended consequence we are seeing is first-home buyers and owner occupiers also pulling back from the market.” Dwelling values across Greater Brisbane as a whole fell 0.2 per cent over the month of September alone, the sixth straight month of falls. Many of the suburbs with the biggest falls were in Brisbane’s middle-ring areas and there were also falls across parts of the Logan area, among others.
MELBOURNE See the Melbourne suburbs rebounding, those falling fastest Home values fell or flatlined in almost every Melbourne suburb and the city downturn is now widespread. More affordable suburbs appeared to be taking a hit from rate hikes earlier in the year and often had some of the largest value drops. Melbourne housing markets are expected to bottom out first.
There were just 34 out of 400-odd suburbs where house values grew, and many were top-end suburbs, leading some to speculating a bottom could be in site for the higher-end of the Melbourne market. Only 28 suburbs recorded average unit value gains out of more than 280 with available data — just under one in 10. The handful of suburbs defying the odds were topped by bayside havens in Melbourne’s southeast.
The remainder of the top performing areas for houses were heavily skewed towards outer fringe areas known for their larger allotments and lifestyle locations. REA Group economist Luc Redman said while declines continued, the numbers behind the scenes in Melbourne for the past few months could indicate a “stabilisation”. “Melbourne is most likely to see the market bottom out sooner than other areas, as the ability to service loans in Victoria are a bit better than other parts of the country,” Mr Redman said.
SYDNEY Sydney suburbs with deepest falls in values revealed Home value falls were the most widespread across Sydney, which remains the most interest rate sensitive market in the country. Realestate.com.au data showed house prices fell across nearly 97 per cent of Sydney suburbs over the past three months, with only six suburbs recording growth in values. RBA governor Michele Bullock announced another rate hike this month.
Sydney remains the most sensitive to rate changes due to higher debt levels. Picture: Nikki Short An average of more than $90,000 was wiped off home values over the period in close to 125 areas, or about in five Sydney suburbs. Recent falls were also widespread across Sydney’s apartment market, which had previously been less impacted by the slump.
Unit values dropped in 81 per cent of suburbs with available sales data over the quarter. Suburbs with some of the largest recent falls in unit prices, ranging from 8-18 per cent over the quarter, included a range of outer- and middle-ring areas. HOBART Hobart’s top growth and price falls by suburb Hobart house prices shrunk in the majority of areas over the three month period, with suburb falls ranging from 0.1 to 2.2 per cent.
The rare areas with increasing medians were led by city suburbs Lenah Valley and Mount Stuart, according to the realestate.com.au figures. ADELAIDE Less than 4 per cent of the 462 suburbs across metro Adelaide with house and unit data recorded value growth over the past quarter. Industry figures like Tom Panos have said uncertainty over budget changes was affecting demand across all buyer types.
Picture: Richard Dobson Just 18 of these (3.89 per cent) saw an uptick in value over the quarter, with another 24 recording no change from July’s report. In what will come as a major concern to homeowners, but likely presents opportunity to those trying to get into the market, values decreased in the remaining 420 (90.9 per cent) of suburbs realestate.com.au had house or unit data for.
Source: Real Estate
