Australia’s housing market decline in 2022 was sharpest in Sydney, where property values dropped by 10.9%, according to . Melbourne followed with a 5.9% fall. In contrast, Adelaide saw a 10.2% rise, and Perth recorded a 5.7% increase.
Canberra and Brisbane experienced declines of 6% and 1.1%, respectively. Overall, combined capital city house prices fell by 5% in 2022.
Signs of Stabilisation in Late 2022
The December quarter brought a slower pace of decline compared to the September quarter. Dr Nicola Powell, Domain’s Chief of Research and Economics, noted that Sydney, Brisbane, and Canberra saw milder drops, while Melbourne, Adelaide, and Hobart showed slight growth.
Melbourne posted a 0.7% increase, and Sydney’s decline eased to 2.1%. Powell attributed the September downturn to interest rate shocks and high inflation, which hit hardest during the spring selling season.
Supply Constraints and Buyer Adjustment
Powell explained that tight housing supply is helping to stabilise prices. Many sellers are delaying listings until interest rates and market conditions settle. Buyers, meanwhile, are adjusting to reduced borrowing capacity and higher debt costs.
Domain Home Loans estimated that due to eight rate hikes by the Reserve Bank of Australia (RBA) in 2022, a $1 million mortgage now costs nearly $1,800 more per month than it did a year ago.
