The succeeding rate hikes, surging inflation, and weakening consumer sentiment have resulted in a more widespread downturn in the residential property market, with over half of the suburbs reporting a decline in values in the past year.
CoreLogic’s Mapping the Market report showed that 51.7% of 4,661 house and unit suburbs witnessed an annual drop in values.
Meanwhile, 80.7% of the markets started recording a quarterly decline by the end of 2022. Over the same time in 2021, fewer than 10% of house and unit markets recorded a decline in values.
CoreLogic economist Kaytlin Ezzy said these results reflect the extent of the changes in the residential property market, which has “dramatically moved from boom to bust”.
“The market downswing doesn’t discriminate, with only a small proportion of suburban areas riding a wave of positive growth among the sea of declining values,” she said.
“This has resulted in a reduction in the number of million-dollar suburbs, particularly in our most expensive housing market, Sydney, with the most resilient suburbs found in more affordable areas and within the unit sector.”
A positive note about the current downturn, however, is the opportunity it has given to buyers who were previously priced out of some markets, particularly in some of the capital cities like Sydney, Melbourne, Brisbane, Hobart, and Canberra.
“However, it’s likely much of the benefits of falling values have been offset, with rising interest rates pushing serviceability buffers and mortgage repayments higher,” she said.
Here’s how each capital city performed over the past year:
Sydney
Over the year, seven of the 547 house suburbs analysed recorded an increase in values, most of which are concentrated in the city’s southeast region.
However, the widespread decline has seen million-dollar house suburbs in Sydney decline from 439 in the March quarter to 345 by the end of the year.
Meanwhile, Sydney’s unit values fell 9.2% over the year — declines were recorded in 272 unit markets quarterly and 278 unit markets annually.
Melbourne
Six of the 371 analysed suburbs in Melbourne reported a quarterly increase in values while eight registered an annual rise.
In terms of units, values were down 5% since the peak achieved in April last year.
Markets in the Melbourne’s inner-city region are among the most resilient to declining values, with East and West Melbourne, Southbank and Docklands recording annual increases of 12.9%, 9.5%, 9.2%, and 8.9%, respectively.
Brisbane
Unit sellers in Brisbane were at a disadvantage over the last quarter of 2022, with values falling 1.8%. The city came off a two-year winning streak in the unit segment — despite this, 97.7% of unit suburbs have a current median value below $750,000.
Meanwhile, 302 of the 320 hosing suburbs in Brisbane witnessed a decline in house values over the last quarter of 2022.
Adelaide
Quarterly declines in Adelaide’s housing market accelerated by the end of 2022 and premium suburbs were the most impacted.
Adelaide’s unit market, however, remains more resilient — only 21 of the 85 unit markets analysed reported a decline in values during the quarter.
Perth
Perth was able to defy the downtrend seen across other capitals, with its house values rising marginally by 0.1% over the quarter. This led to a 3.9% increase in median value over the year.
Detached homes are the cheapest in Perth, with a median value of only a little over $580,000.
Unit values in the Western Australian capital, however, declined 1.2% during the quarter.
Hobart
A steeper rate of decline was recorded over the last quarter of 2022 in Hobart’s housing market at 5%, bringing the median value to around $726,000.
Unit values in Hobart also saw a decline in both quarterly and annual terms.
Darwin
The share of suburbs recording a decline in house values increased substantially over the quarter, up from 35.1% to 84.2%.
Over the unit markets, Darwin remained the most affordable city despite the 0.2% increase in median value to roughly $383,000.
Canberra
All 83 Canberran suburbs analysed recorded a decline in median values over the December quarter.
Canberra has been experiencing a sustained downturn, leading to the share of suburbs recording an annual drop growing from 27.1% to 86.7%.
Meanwhile, Canberra’s unit markets reported a 2% drop in values, which are now below $600,000.
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