The Australia property market has taken a sharp turn, with house prices falling at a record pace. According to , national home values dropped by 7.9% in February compared to the same month in 2022—marking the steepest annual decline on record.
Sydney led the downturn with a 13.4% drop, followed by Melbourne at 9.6%. Hobart saw an 11.8% fall, while Brisbane, Canberra, and Adelaide recorded declines of 6.8%, 6.7%, and 5.1% respectively. Darwin dipped 2.9%, and Perth fared best with a modest 2.4% decrease.
Despite the downturn, the total value of residential real estate in Australia remains substantial at $9.3 trillion—down from its $10 trillion peak in April 2022.
What’s Driving the Australia Property Market Slump?
CoreLogic notes that the decline in the Home Value Index has slowed, but uncertainty looms with further interest rate hikes expected in 2023. Buyer demand has weakened, selling times have lengthened, and distressed sales may rise as fixed-rate mortgages expire.
According to , easing serviceability buffers and potential government incentives could help stabilise housing values. Meanwhile, the rental market remains tight due to limited supply and renewed overseas migration.
CoreLogic’s 2023 Forecast Highlights
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Home values may stabilise once interest rates peak
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Distressed sales could increase due to mortgage stress
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Fixed-rate refinancing surge expected as loans expire
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Mortgage arrears may rise with higher repayments
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New listings likely to grow as pent-up supply enters the market
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Rental pressure to persist due to supply constraints
