CoreLogic’s National Home Value Index revealed national dwelling values have lost roughly $53,400 below the peak value recorded in April 2022.
The declines come after housing values surged by 28.6% through the recent upswing, adding about $170,700 to the value of an average dwelling.
As of November 2022, the current median house price sits at $714,475.
CoreLogic Research Director Tim Lawless said the easing in the rate of decline is mostly coming from Sydney and Melbourne markets.
“Three months ago, Sydney housing values were falling at the monthly rate of 2.3% - that has now reduced by a full percentage point to a decline of 1.3% in November,” Mr Lawless said.
“Meanwhile, Melbourne home values were down 1.5% over the month, with the monthly decline almost halving last month, [down] 0.8%.”
The slowdown was also apparent in smaller capitals and most regional markets.
CommBank Senior Economist Kristina Clifton said the housing market is typically one of the most interest rate sensitive parts of the economy.
“Falling prices and sales volumes are to be expected given the RBA has delivered 275 basis points of interest rate tightening since May,” Ms Clifton said.
“Lower dwelling prices can result in negative wealth effects where households spend less as a result of the psychological impacts of falling prices.”
| Month | Annual | Median value | |
| Sydney | -1.3% | -10.6% | $1,025,684 |
| Melbourne | -0.8% | -7.0% | $759,496 |
| Brisbane | -2.0% | 3.3% | $715,130 |
| Adelaide | -0.3% | 13.4% | $649,979 |
| Perth | 0.0% | 3.9% | $560,789 |
| Hobart | -2.0% | -4.1% | $684,828 |
| Darwin | 0.2% | 5.5% | $510,105 |
| Canberra | -1.2% | -1.3% | $869,235 |
| Combined capitals | -1.1% | -5.2% | $778,368 |
| Combined regional | -0.9% | 3.3% | $578,506 |
| National | -1.0% | -3.2% | $714,475 |
Source: CoreLogic Home Value Index as at 30 November, 2022.
According to Mr Lawless, the data could suggest the property market has moved through the worst of the downturn, but notes future rate hikes could jumpstart the rate of decline once again.
“I think the initial shock of rising interest rates seemed to have worn off, and we’re now seeing a slowdown of the rate hiking cycle and hopefully getting close to a peak,” he said.
“However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.
“There is still the possibility that the pace of declines could reaccelerate, especially if the current rate hiking cycle persists longer than expected.”
The biggest booms, and biggest declines by state
Across the capital cities, Brisbane and Hobart took the crown for the highest monthly decline, both recording a 2% drop.
At the other end of the spectrum, Perth house values remained consistent in November while Darwin posted a 0.2% increase over the same month.
Mr Lawless said the Perth and Darwin markets are yet to record any signs of material reversal in housing prices.
“A comparatively healthy level of housing affordability, along with tight labour markets and relatively strong economic conditions, have helped to insulate these cities from the downturn so far,” he said.
Meanwhile, the speed of decline slows in Sydney and Melbourne with prices falling by 1.3% and 0.8% respectively.
Three months ago, Sydney house values were dropping at a monthly rate of 2.3% - the capital is still the only city where housing values have fallen by more than 10% from their peak.
Brisbane values fell by 2%, the same rate a month ago, and Adelaide dropped by 0.3%.
The 2023 property crystal ball - how far will house prices drop?
“Overall, the price correction still looks to be well entrenched across price tiers and sub–markets,” Westpac economist Ryan Wells said.
“Although the pace has moderated in recent months, stabilisation still looks a long way off given the RBA’s ongoing rate hike cycle.”
The forecast amongst the big-four banks sits between a 15-20% drop in the new year.
“We [CommBank] forecast a peak to trough fall of 15% with prices likely to bottom out around late 2023,” Ms Clifton said.
“Rising interest rates are the major factor behind falling dwelling prices in recent months - we expect another 25 basis point lift in the cash rate in December.”
Here are the other major predictions for the housing market next year:
| Bank | Property prediction 2023 | Peak cash rate forecast |
| RBA | 11% fall | - |
| Westpac | 16% fall | 3.85% |
| NAB | 20% fall | 3.60% |
| ANZ | 18% fall | 3.85% |
Read More: Will house values really drop by 20% in 2023?
Advertisement
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
6.04% p.a. | 6.08% p.a. | $3,011 | Principal & Interest | Variable | $0 | $530 | 90% | 4.6 Star Customer Ratings |
| Promoted | Disclosure | |||||||||
5.99% p.a. | 5.90% p.a. | $2,995 | Principal & Interest | Variable | $0 | $0 | 80% | Apply in minutes |
| Promoted | Disclosure | |||||||||
6.09% p.a. | 6.11% p.a. | $3,027 | Principal & Interest | Variable | $0 | $250 | 60% |
| Promoted | Disclosure |
Image by Martin David via Unsplash
Ready, Set, Buy!
Learn everything you need to know about buying property – from choosing the right property and home loan, to the purchasing process, tips to save money and more!
With bonus Q&A sheet and Crossword!
Alex Brewster
Brooke Cooper
