Dwelling values see lowest monthly fall since August: CoreLogic

The Home Value Index (HIV) published by CoreLogic has revealed the seventh month of declines, showing a drop of 1 per cent over the month of November, leaving figures 7 per cent lower than the peak value recorded in April 2022.

According to the index, the fall followed the surge in national housing values (28.6 per cent higher through the recent upswing), which has added approximately $170,700 to the average dwelling values.

However, the rate of decline has been consistently moderating since the national index dropped by 1.6 per cent in August 2022.

Brisbane and Hobart led the monthly rate of decline for November, both down by 2 per cent, while Perth and Darwin saw a slight increase of 0.2 per cent over the month.

Sydney is the only city in which housing values have declined by more than 10 per cent from its peak. Despite the 11.4 per cent drop, Sydney home values are still 10.3 per cent above the pre-pandemic levels of March 2020.

In Melbourne, values are only 2.8 per cent above pre-COVID levels due to a weaker upswing, the index stated. The HIV indicated that Melbourne’s dwelling values could fall to pre-COVID levels by March next year if dwelling values continue to fall at the current pace of 0.8 per cent month-on-month.

CoreLogic’s research director, Tim Lawless, said the easing rate of decline is largely stemming from the Melbourne and Sydney markets.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 per cent. That has now reduced by a full percentage point to a decline of -1.3% in November,” Mr Lawless stated.

“In July, Melbourne home values were down -1.5 per cent over the month, with the monthly decline almost halving last month to -0.8 per cent.

“The rate of decline has also eased across the ACT (from a -1.7 per cent fall in August), and is no longer accelerating in Brisbane. Most of the broad rest-of-state markets have also seen the pace of declines decelerate.”

Further rate rises continue downward trend

Home price falls nationally have accelerated from October’s slower pace of declines, according to PropTrack’s Home Price Index.

The index recorded a national home price drop of 0.16 per cent for the month of November, with prices declining in almost every capital city. Darwin and Melbourne recorded the largest drops at 0.49 per cent and 0.33 per cent, respectively.

On the contrary, South Australia saw a rise of 0.25 per cent in prices, bringing the state up to a new peak.

Regional Queensland declined the quickest in November, dropping by 0.49 per cent, however, the regional prices have held up better than their city counterparts, falling 0.16 per cent but still 3.89 per cent above last year’s levels.

According to PropTrack’s index, borrowing costs will continue to rise and borrowing capacities will decline due to the inevitable rate rise of 25 bps, bringing the cash rate above 3 per cent in December.

Reductions in borrowing capacities imply further price falls, although positive demand effects will somewhat mitigate downward pressure, with prices likely to settle once rates cease to rise in 2023, the index stated.

[RELATED: Housing downturn is accelerating, finds CoreLogic]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.