Home values in Sydney have declined for the first time since January 2023, a new report from CoreLogic has revealed.
In its Hedonic Home Value Index (HVI) for October, home values in Sydney were found to have declined by 0.1% in October, with a similar result in Darwin. Canberra and Melbourne saw a decline of 0.3% and 0.2%, respectively, while Perth saw a rise of 1.4%. The numbers caused the HVI to rise by 0.3%, which entailed the 21st consecutive month of growth since the cycle began in February 2023.
In Sydney, the weaker conditions were led by a 0.6% decline in upper quartile houses value and a 1.1% decline over the past three months. Meanwhile, the lower quartile house and unit values in Sydney saw a rise by half a percent.
CoreLogic research director Tim Lawless pointed out that the stronger performance seen in the affordable part of the market was consistent among the capital cities.
“A combination of less borrowing capacity and broader affordability challenges, as well as a higher-than-average share of investors and first home buyers in the market is the most likely explanation for stronger conditions across the lower value cohorts of the market,” said Lawless.
“The past three months has seen the lowest quartile either record a higher growth rate or smaller decline relative to the upper quartile or broad middle of the market across every capital city except Canberra.”
With the slowed growth in home values, there was a rise in advertised stock levels as there has been a 12.7% increase in advertised inventory since the end of winter across the combined capitals. Perth saw the largest increase, with listings being 20.6% higher.
“Total listings are now 13.2% above the previous five-year average in Sydney and 13.0% higher in Melbourne. Despite the rise in listings across the mid-sized capitals, Perth, Adelaide, and Brisbane are still seeing advertised stock levels more than -20% below the five-year average for this time of the year,” said Lawless.
“These markets remain well and truly in favour of sellers, although the balance is starting to gradually improve,” he added.
In addition, the number of home sales were found to be declining as the estimates for capital city sales activity over the last three months fell by 7.5% from the previous quarter and 1.6% year-over-year.
