Australian home values are declining, largest decline in recent times


Homes around Australia have lost an estimated average of $64,820 in value since May last year according to CoreLogic’s Daily Home Value Index.

“While the housing downturn between 2017 and 2019 lasted 20 months, the new record-breaking price falls have played out in less than nine months, with further falls expected in the months ahead,” CoreLogic Australia’s Head of Research Eliza Owen said.

CoreLogic bases its Home Value Index on three broad housing types: detached housesunits and a combined dwellings index that includes both houses and units.

Key points:

  • Australian home values have seen their biggest decline since 2019
  • Sydney, Brisbane and Melbourne home values are seeing the largest downturn
  • Experts expect values to keep declining into 2023

Why are house prices tanking now?

Ms Owen says the main force behind the decline is the dramatic cycle of rate hikes in the back half of 2022.

“A 300-basis point increase in the underlying cash rate over just eight months has resulted in a rapid reduction in borrowing capacity, lowering the amount buyers can offer for homes,” Ms Owens said.

Household debt is also a factor in the price of Australian homes, households with higher debt are hit harder but interest rate rises are eroding any savings that could be used for a home loan deposit.

It’s important to remember that this dramatic downturn of housing prices is coming off a very high base, Ms Owens says.

Dwelling values increased an eye-watering 28.9 per cent between September 2020 and May 2022, which was the fastest rise in home values nationally on record.

So, while the current decline might seem extreme, at the end of 2022, home values were still 16 per cent higher than they were five years ago, and 59.8 per cent higher than they were 10 years ago.

Which cities have seen the biggest drops?

Australia’s three biggest capital cities, SydneyMelbourne and Brisbane, are responsible for the bulk of the decline, according to CoreLogic’s data.

The following numbers show the percentage and estimated dollar value change in homes from May 7, 2022 to January 7, 2023.


Percentage change: -8.4 per cent

Dollar value change: -$64,820


Percentage change: -13 per cent

Dollar value change: -$150,758


Percentage change: -8.6 per cent

Dollar value change: -$70,243


Percentage change: -10 per cent

Dollar value change: -$78,381


Percentage change: -1.6 per cent

Dollar value change: -$10,395


Percentage change: -0.7 per cent

Dollar value change: -$3,897

Home values ‘expected to continue falling’

According to Ms Owen, Australians can expect home values to decline this year.

“Over the coming months, housing market conditions are expected to remain soft,” Ms Owens said.

“The underlying cash rate is likely to see further increases in 2023 and ongoing increases in interest rates will further erode the borrowing capacity, likely prolonging the country’s housing downturn until interest rates stabilise.”

Article Credited to Velvet Winter @ ABC News

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