With softening business conditions and economic growth subdued, commercial property market sentiment remained negative in the September quarter
Insight
The housing downturn accelerated through August, as falling values became more widespread, taking CoreLogic’s national Home Value Index into a fourth consecutive month of decline. The national index was down -1.6% over the month, which was the largest month-on-month decline since 1983.
Every capital city apart from Darwin is now in a housing downturn, with a similar scenario playing out across the rest-of-state regions, where only regional South Australia recorded an increase in housing values for the month.
Sydney continued to the lead the downswing, with values falling -2.3% over the month, however weaker conditions in Brisbane accelerated sharply through August, with values falling -1.8%.
After recording significantly stronger appreciation through the upswing, the fall in regional dwelling values is catching up with the capital cities. Regional home values were down -1.5% in August compared with a -1.6% fall in values across the combined capitals. Between March 2020 and January 2022 regional dwelling values surged more than 40% compared with a 25.5% rise for the combined capitals.
The largest falls in regional home values are emanating from the commutable lifestyle hubs where housing values had surged prior to the recent rate hikes. Over the past three months, values are down -8.0% across the Richmond-Tweed, -4.8% lower across the Southern Highlands-Shoalhaven market and down -4.5% across Queensland’s Sunshine Coast, as a few examples.
Despite the recent weakness, housing values across most regions remain well above pre-COVID levels. Home values in all capital cities and rest-of-state regions, bar Melbourne, remain 15% or above the levels recorded in March 2020, implying most home owners have a significant equity buffer before their home is likely to be worth less than what they paid.
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