Australian house prices recorded a 0.16% fall during November, as the traditional spring selling season did not live up to its name in 2022, according to PropTrack’s latest report.
The PropTrack November Home Price Index revealed that prices fell across each capital city, with Darwin (-0.49%) and Melbourne (-0.33%) recording the largest falls. These cities were closely followed by Hobart (-0.27%), Sydney (-0.14%), Brisbane (-0.04%), Perth (-0.04%) and ACT (-0.02%) all recording drops.
The only capital city that recorded price rises during November was Adelaide by 0.25%. Across the capitals, prices are down 3.09% compared to their level a year ago, while regionally they are up 3.89%.
The ongoing fall in property prices comes at the same time as a decline in listings with PropTrack reporting new property listings were down 7.5% month-on-month nationally during September.
The November Home Price Index also showed that South Australia continued to defy the nationwide decline in prices. House prices in regional South Australia recorded the strongest pace of growth in November, rising 0.30% to reach a new price peak. Meanwhile, regional house prices across the nation are tumbling, with regional home prices in Queensland falling the fastest in November, slipping 0.49%.
PropTrack senior economist Eleanor Creagh (pictured above) said rising interest rates had quickly rebalanced the housing market from last year’s extreme growth.
“National home prices have fallen for the eighth month in a row with the fastest interest rate tightening cycle since the 1990s weighing on home prices in most parts of the country,” Creagh said.
“Though the pace of price falls remains significantly less than the larger falls seen in June and July when interest rates first started rising. The downturn has continued to deepen as interest rates continue to rise.”
Creagh said the latest 25-basis point rate rise, which took the cash rate to 3.10% on December 6, plus additional rate rises on the horizon, would result in borrowing costs continuing to climb and reduced maximum borrowing capacities.
“The significant reduction in borrowing capacities implies further home price falls,” she said. “Though, positive demand effects will counter the downward pressure to a degree, with price falls likely to ease once interest rates stop rising in 2023.”
Here’s how home prices declined across Australia’s capitals and the ACT during November:
Sydney
Creagh said Sydney home prices fell 0.14% in November and were now down 6.44% over the past year.
“Prices have fallen persistently since March this year, with Sydney seeing the greatest falls of any market,” she said. “As interest rates have risen, home prices are falling fastest across more expensive regions and property types. Sydney (the priciest capital city nationally), is bearing the brunt of these effects, however, the pace of price falls has eased from the faster pace seen in June and July.”
Melbourne
Creagh said Melbourne home price falls accelerated in November, slipping 0.33% – the second largest price fall of the capital cities.
“Prices are now 4.49% below their November 2021 level and 5.30% below their recent peak. Price falls are expected to continue in the period ahead as interest rates continue to rise, further reducing borrowing capacities.”
Brisbane
Creagh said Brisbane prices recorded a slight fall (-0.04%) in November and were now 2.71% below their peak recorded in April 2022.
“Brisbane is the second strongest capital city market with prices up 4.72% over the past year, however, conditions in Brisbane have quickly shifted due to the fast pace of rate rises.”
Adelaide
Creagh said Adelaide remained the strongest performing capital city market over the past year.
“Adelaide saw home prices rise 0.25% to another fresh peak in November, recording annual growth of 12.63%,” she said. “Demand for more affordable regions and larger homes has buoyed the Adelaide market and is likely to continue to do so.”
Perth
Creagh said Perth home prices recorded a slight fall (- 0.04%) in November, however they continued to hold up better than other capital cities.
“Prices have increased 4.13% over the past year and remain just shy of peak levels.”
Hobart
Creagh said Hobart home prices fell 0.27% in November to sit 2.92% below the peak in April.
“However, prices remained 1.06% higher than levels seen in November last year and up 43.8% compared to pre-pandemic levels in March 2020.”
ACT
Creagh said Canberra prices were flat in November (- 0.02%) and prices were now sitting 4.20% below their peak in March and below their level in November 2021.
Darwin
Creagh said Darwin led price declines across the capitals in November with home prices falling 0.49%, to sit just 0.77% above levels seen in November 2021.
