Sydney, Hobart, Brisbane: Cities where property prices fell by double-digit figures since peak
Property prices have plunged by record double-digit numbers in major Australian cities since peaking last year and another interest rate hike is expected next week.
While some markets are still at their peak, Sydney, Brisbane and Hobart are seeing, or close to, a record price drop.
Property prices in the capital city in January fell another 1.1 percent for an annual decline of 8.7 percent, making it the most dramatic drop on CoreLogic’s records since 1981.
However, price drops would still do little to undo increases in value between 2020 and 2022.
This means home affordability remains much worse than it was before the pandemic, leaving fewer options for first-time homebuyers as rising interest rates further limit what banks can do. lend.
Sydney is Australia’s hardest-hit market by far, as median house prices have plunged 15% in the year to January to $1,205,618, marking the biggest annual drop since 1983.
Property prices have plunged by record double-digit numbers in major Australian cities since peaking last year and another interest rate hike is expected next week (a Melbourne auction pictured )
Prices there peaked in January last year, when interest rates were still at a record low of 0.1 percent.
Property price falls fail to undo Covid gains
SYDNEY: 13.8% decrease from Jan 2022 to $999,278 after a 27.7% increase
MELBOURNE: 9.3% decrease from February 2022 to $746,468 after a 17.3% increase
BRISBANE: Record 10.7% decline since June 2022 to $698,204 after a 42.7% increase
ADELAIDE: 2.1% decrease from July 2022 to $646,045 after a 44.7% increase
PERTH: 0.9% decrease from July 2022 to $559,971 after a 25.9% increase
HOBART: Record 10.8% decline since May 2022 to $666,431 after a 37.7% increase
CANBERRA: 8.6% decrease from June 2022 to $841,605 after a 38.3% increase
darwin: 1.3% decrease from August 2022 to $500,228 after a 31.1% increase
Source: CoreLogic data on home and unit prices together showing a decline from the 2022 peak and a trough-to-peak rise
House and unit prices together in the property market in Australia’s most expensive capital have plunged 13.8% over the past year to $999,278, not far from the record 14.9% drop for Sydney. between 2017 and 2019.
But this sharp recession would barely offset the 27.7 percent increase between 2020 and 2022.
In Brisbane, property prices peaked a little later in June and have since plunged a record 10.7 percent to $698,204.
However, house prices in the Queensland capital soared 42.7 per cent during the pandemic.
The median home price in the city of $773,509 is 6.4 percent lower than the previous year.
Hobart house and unit prices have plunged a record 10.8 per cent to $666,431 from the May high, but this would be insufficient to undo the 37.7 per cent trough-to-peak rise.
Median house prices in the Tasmanian capital have fallen 9.4 percent over the past year to $713,061.
House prices in the Tasman region rose 51% during the pandemic and have fallen 6.1% from the June peak to $506,293.
Melbourne’s median house and unit price has fallen 9.3% from the February 2022 peak, back to $746,468, but it would still be insufficient to offset the 17.3% pandemic rise.
The median home price in the Victorian capital plunged 10.8 percent to $900,107 in the year to January.
House prices in Adelaide have only fallen 2.1 per cent since peaking in July 2022, at $646,045, but prices rose 44.7 per cent during Covid.
Sydney house and unit prices together have plunged 13.8 per cent over the past year to $999,278, not far from the record 14.9 per cent drop between 2017 and 2019 (pictured , Circular Quay)
Over the past year, the median house price in Adelaide rose 6.2 per cent to $696,718.
Regional house prices in South Australia are still at an all-time high, having risen 47 per cent during the pandemic to a still-affordable $352,955.
Perth prices have fallen just 0.9% to $559,971 since peaking in July 2022, with house and unit prices rising 25.9% during the pandemic.
The median home price of $585,326 is 2.9 percent higher than a year ago, but it’s still the only capital city in the state where a median-income worker earning $92,000 can buy without mortgage stress. .
In Brisbane, property prices peaked a little later in June and have since plunged a record 10.7 per cent to $698,204 (pictured, Story Bridge looking from New Farm towards downtown the city)
Hobart house and unit prices have plunged a record 10.8 per cent to $666,431 since the May peak (pictured, Salamanca Place)
Regional house prices in Western Australia are still at an all-time high, having risen 32.1 per cent during the pandemic to $424,210.
Rate hikes reach borrowing limits
INDIVIDUAL: Average person with a full-time salary of $92,030 would have seen their borrowing capacity drop by $143,000 from $568,000 in April 2022 to $425,000 in February 2023 with another rate increase.
With a 20 percent deposit, that’s the difference between being able to buy a $710,000 home and a $531,250 property.
COUPLES: Dual-income borrowers at $184,060 would have seen their borrowing capacity decrease by $329,000 from $1,309,000 in April 2022 to $980,000 in February 2023 with another rate increase.
That’s the difference between being able to buy a $1,636,250 house and a $1,225,000 house with a 20 percent down payment.
Canberra’s house and unit price has plunged 8.6% since peaking in June 2022, back to $841,605, but is well below the 38.3% rise from the trough up to the max.
Darwin prices have fallen just 1.3% to $500,228 since peaking in August, which would barely undo the 31.1% rise during the pandemic.
CoreLogic research director Tim Lawless said a series of interest rate hikes had stopped Australians from buying real estate.
“It’s harder for consumers to make high-commitment decisions, like buying or selling a home,” he said.
“Until Australians have a higher level of confidence regarding their household finances and the outlook for the economy, they are likely to continue to delay major financial decisions.”
Westpac senior economist Matthew Hassan said 41 of Australia’s 50 submarkets fell in January, during a month of lower summer transaction volumes.
“The correction remains broad and firmly entrenched,” he said.
Economists widely expect the Reserve Bank of Australia to raise interest rates in February by another quarter of a percentage point to a new 10-year high of 3.35 percent, up from 3.1 percent now.
Last year, interest rates rose three percentage points, through eight consecutive monthly increases, marking the most severe pace of monetary policy tightening since the RBA began publishing a target cash rate in 1990.
Lenders must model a potential borrower’s ability to cope with a three percentage point increase in variable mortgage rates.
What does a rate hike in February mean?
$500,000: Up to $77 to $2,752 from $2,675
$600,000: Up to $93 to $3,303 from $3,210
$700,000: Up to $108 to $3,853 from $3,745
$800,000: Up to $123 to $4,403 from $4,280
$900,000: Up to $139 to $4,954 from $4,815
$1,000,000: Up to $154 to $5,504 from $5,350
Calculations based on a Commonwealth Bank variable loan increasing from 4.97% to 5.22% to reflect the Reserve Bank of Australia cash rate increasing from 3.1% to 3.35%