Australian Housing Market Update: March 2019

National dwelling values have returned to levels last seen in September 2016, and values have fallen over fourteen of the last sixteen months.

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Last month’s housing market results showed an easing in the rate of decline relative to the previous two months, however CoreLogic’s national home value index was down a further 0.7% in February, taking the total decline in national dwelling values to 6.8% since the market peaked in October 2017.  National dwelling values have returned to levels last seen in September 2016, and values have fallen over fourteen of the last sixteen months.

Although home values have been falling for almost a year and a half, nationally dwelling values remain 18% higher than they were five years ago highlighting that most home owners remain in a strong equity position despite the persistently weak conditions.

Despite the reduced rate of decline, the February results remain overall weak, with the geographic scope of negative conditions becoming more widespread over recent months.

On an annual basis, only three of Australia’s eight capitals have recorded a rise in values, led by Hobart where values were up 7.2%.  Brisbane, with values down half a percent, is showing the first negative annual change since 2012 and Sydney’s housing market moved into double digit annual declines for the first time since the early 1980’s. If Melbourne’s downturn continues at a similar pace we are likely to see the annual decline move into double digit falls over the coming months as well, with values currently 9.1% lower over the year.

Both Perth and Darwin appear to have caught a second wind in the market downturn with the annual pace of decline previously improving but now worsening. This renewed downwards pressure on home values coincides with a softening in labour market conditions, with weaker housing market results likely compounded by credit scarcity.

Regional housing market values are generally holding firmer than capital city markets, with dwelling values down 1.4% over the past twelve months compared with a 7.6% fall in capital city dwelling values.

The fact that we are seeing weakening housing market conditions across regions where home values were previously tracking at a sustainable pace and economic conditions are relatively healthy is a sign that tighter credit conditions are having a broad dampening effect on buyer activity.

To find out more, read the March Housing Market Update transcript or take a look at the national update or your capital city update by clicking on the relevant link below:

National

Sydney

Brisbane

Melbourne

Adelaide

Perth