Housing prices are falling in almost every suburb in Australia’s biggest cities, with values dropping faster in Brisbane than Sydney as the slowdown intensifies. Prices nationally have fallen 5.2% from their peak in March to where they were a year ago, Cotality data released on Thursday shows. Economists say prices are on track to fall at least 10% after the Reserve Bank lifted rates for the fourth time this year on Tuesday, pushing more buyers out of the market.
Brisbane’s home prices dropped 1.5% in September, with every suburb in the city recording lower prices compared with June. The median Brisbane home was worth $1.05m, down by $59,000 since May. The Queensland capital had seen prices surge 18% over the preceding 12 months.
Sydney median values dropped 1.4% in the month and were down 8.6% from their record high in March, the equivalent of a $112,000 drop. Just four Sydney suburbs held steady in recent months. Melbourne prices were down 0.7% since March.
While a handful of suburbs have seen prices continue to rise, Joe Trucchio, a buyer’s agent at Property Home Base, said the downturn had swept the city. Comparison website Canstar has estimated this year’s four hikes have cut $47,400 from the borrowing capacity of someone earning an average annual full-time wage of $108,650. Darwin was the only city to not experience a fall in prices, increasing 0.4%.
Housing prices would have to fall roughly 10% to offset a 1 percentage point increase in interest rates and no suburbs have reached that threshold. However, Trucchio said dwellings on the cheaper end of the market had garnered more interest as first home buyers regained confidence. The Albanese government on Thursday reported over 102,000 people had been supported with first home loans under the 5% deposit scheme in the year since it was expanded.
The scheme has supported over 8,400 new first home buyers a month since June on average, relatively stable compared to the 8,600 a month average from October to May. The RBA governor, Michele Bullock, said on Tuesday the central bank considered leaving rates on hold amid an unexpectedly weak housing market but ultimately decided to lift. She said falling prices would probably worsen housing supply by making new construction unprofitable.
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