The current house price downturn has been slowing down in recent months — still, it has brought down Sydney’s median dwelling price to below $1m.
CoreLogic’s latest Home Value Index (HVI) showed a 1.2% monthly and 13.8% annual decline in Sydney’s median dwelling price in January, bringing it to $999,278, marking the first time it went below $1m since March 2021.
This came with a milder decline on the national level, with dwelling prices falling 1% in January, which is the smallest month-on-month decline since June last year.
Every capital city posted a decline in dwelling values through the month, led by Hobart (1.7%) and Brisbane (-.4%), while the smallest drops were recorded in Perth (0.3%) and Darwin (0.1%).
CoreLogic research director Tim Lawless said most noticeable easing in value falls can be seen across the premium end of the housing market, where the country’s most expensive properties have led both the recent upswing as well as the current downturn.
“While this trend towards improving conditions across premium markets is not evident in all cities, it is most apparent in Sydney’s detached house market — The improvement could be reflective of more buyers taking advantage of larger price drops across the premium sector, where house values are down -17.4% since peaking in January 2022,” he said.
Meanwhile, regional housing values continued to register a milder rate of decline compared to their capital city counterparts. This trend has been playing out through most of the downturn to-date.
In fact, housing values surged 41.6% higher through the upswing across the combined regional markets compared with a 25.5% rise in values across the combined capital cities.
Since peaking in June, the combined regionals index is down 7.4%, while capital city values are now 9.6% below their April peak.
“Despite easing rates of internal migration and a partial erosion of the pre-pandemic affordability advantage, regional housing values are holding up better than capital city markets,” Mr Lawless said.
"This will be an interesting trend to watch over the longer term, but at the moment it seems regional housing markets have seen a structural shift in the underlying demand profile. With more Australians willing to base themselves outside of the capital cities and remote working remaining a viable option across some sectors of the labour force, it’s unlikely we’ll see a mass exodus from regional markets.”
It is crucial to note that January marked a new record for how much and how fast dwelling values have fallen in Australia.
The national home value index is down 8.9% since peaking in April last year, making this the largest and fastest decline in values since at least 1980 when CoreLogic’s records began.
Mr Lawless said it is crucial to understand the context of this downturn.
“Record declines in home values follow a record upswing, both in magnitude and speed — the national home value index was up a stunning 28.6% in the space of just 19 months,” he said.
“Despite the recent sharp drop in values, every capital city and rest-of-state region is still recording home values above pre-pandemic levels, although Melbourne’s index would only need to fall a further 0.4% before equalling the March 2020 reading.”
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Photo by Hans on Pixabay.
