Recent data from CoreLogic’s Housing Chart Pack reveals that property values have fallen in nearly a third of Australian suburbs over the last quarter.
Today’s update.
| Australian Suburbs’ Values Fall in Q2 2024
• Nearly 30% of Australia’s 3,655 suburbs are experiencing price decline, with most decreases concentrated in four major cities. • Melbourne and regional Victoria are the most affected, with prices dropping by 79.1% and 73.8% respectively. • Hobart, Darwin, and Canberra also experience price decreases, with just over half of the suburbs in each experiencing a price drop. • Perth, however, has seen every suburb’s prices rise in Q2 2024. • Economists suggest that quarterly value declines are becoming more common due to cost-of-living challenges and spending ceilings. • In Melbourne, declines are most common in affluent regions, with all Mornington Peninsula suburbs recording decreasing values. • Sydney has seen the biggest increase in the share of suburbs in decline over the past year, from 3.8% to 25.9%. • In regional WA, 127 suburbs recorded a quarterly rise in dwelling values, while all 302 Perth suburbs saw values rise. • The trend of price growth may continue in some markets, but value declines are likely to become more common in spring. |
As we enter spring 2024, the Australian property market is showing varied trends across different regions. Recent data from CoreLogic’s Housing Chart Pack reveals that property values have fallen in nearly a third of Australian suburbs over the last quarter. This represents a significant shift in the market, with most of the declines concentrated in a few major cities rather than being a nationwide trend. Understanding these changes can help buyers, sellers, and investors make informed decisions in the coming months.
Overview of Current Market Trends
According to CoreLogic, approximately 30% of Australia’s 3,655 suburbs have experienced price declines recently. This figure highlights a notable trend but does not necessarily indicate a uniform downturn across all regions. Instead, the declines have been concentrated in specific urban areas, suggesting that the property market is not equally affected everywhere.
Major Cities Experiencing Declines
The most pronounced declines have been observed in Melbourne, which tops the list with 79.1% of its suburbs showing decreased property values. Regional Victoria is also significantly impacted, with 73.8% of its suburbs reporting falls in property prices. This high concentration of declines in these areas points to underlying issues affecting property values in Victoria, including high interest rates and affordability pressures.
Melbourne’s declines are particularly notable in its more affluent suburbs. Areas such as the Mornington Peninsula have seen widespread decreases, with all suburbs in this region experiencing a drop in values. Even in the inner city, traditionally strong markets like Carrum, Box Hill, Deepdene, and Canterbury have only seen a few suburbs recording price increases.
In addition to Melbourne and regional Victoria, other major cities such as Hobart, Darwin, and Canberra have also reported price declines. In these cities, just over half of the suburbs have seen property values drop, reflecting broader economic pressures that are affecting housing affordability and demand.
Perth’s Remarkable Turnaround
In stark contrast to the declines seen in other cities, Perth has shown a remarkable turnaround. Every suburb in Perth recorded an increase in property values over the second quarter of 2024. This marks a significant recovery from the previous year, where 60.1% of Perth suburbs were experiencing declines. As of August 2024, no suburb in Perth has reported a decrease in property values, demonstrating a strong rebound in this market.
The turnaround in Perth is noteworthy for several reasons. It indicates a robust local market that has managed to recover from earlier downturns. Factors contributing to this positive trend include local economic growth, increased demand, and possibly lower interest rates compared to other regions.
Factors Driving the Current Trends
The current market trends are shaped by a combination of factors, including high interest rates, affordability pressures, and regional economic conditions. The overall national values are still rising, but at a slower pace. The slowing growth is attributed to cost-of-living challenges, which continue to impose spending limits on potential buyers and investors.
High interest rates have made borrowing more expensive, which in turn affects buyers’ purchasing power and demand. This has led to price declines in several areas, particularly in regions where affordability is already a concern. As a result, many suburbs are experiencing price drops, especially those in higher-value markets where the impact of rising costs is more pronounced.
Regional Differences and Emerging Trends
The regional differences in property market performance are significant. While Melbourne, Sydney, and other major cities face declines, Perth is experiencing growth. This divergence highlights the uneven impact of national economic trends on local markets.
In Sydney, the number of suburbs experiencing price declines has increased significantly. The share of suburbs in decline has risen from 3.8% a year ago to 25.9% in August 2024. This sharp increase reflects the broader challenges facing the Sydney market, including high property prices and affordability issues.
Conversely, regional Western Australia (WA) has shown strong performance. Of the 146 suburbs analyzed across regional WA, 127 recorded quarterly rises in dwelling values. Additionally, every one of the 302 Perth suburbs saw an increase in property values. This strong performance in WA contrasts sharply with the declines seen in other regions.
Spring 2024 Forecast: What to Expect
As we move into the spring selling season, several factors are likely to influence the property market. The flow of new listings has been above average through the winter months, which has contributed to the current slowdown in growth. With more properties expected to come onto the market during the busy spring period, additional downward pressure on values is anticipated.
Early signs of a slowdown are already evident in markets like Adelaide and Brisbane. In Adelaide, 3.1% of suburbs have recorded price drops, while Brisbane has seen 3.8% of suburbs experiencing declines. These early indicators suggest that the easing trend may continue into the spring, affecting more suburbs and potentially leading to broader price declines.
Implications for Buyers, Sellers, and Investors
For buyers, the current market presents both opportunities and challenges. On one hand, price declines in many suburbs may offer opportunities to purchase property at lower prices. On the other hand, the variability across regions means that buyers need to carefully consider local market conditions and trends.
Sellers may need to adjust their expectations in light of the broader market trends. With price declines affecting many areas, it’s important for sellers to be realistic about their property’s value and be prepared for potential negotiations.
Investors should be cautious but optimistic. While some markets are experiencing declines, others, like Perth, are showing growth. Investors need to stay informed about regional trends and make decisions based on thorough analysis of local market conditions.
What’s Next for the Australian Property Market? Get Expert Insights with ASK Financials!
The Australian property market is currently experiencing a period of significant variation, with price declines concentrated in several major cities and strong performance in others like Perth. As spring approaches, the market is expected to face further shifts, with additional downward pressure on values likely as more properties enter the market.
For professional advice and to understand how these trends might affect your property decisions, reach out to ASK Financials. Our experts can provide market insights and guidance to help you with the evolving market and make informed choices.
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