Key facts
- Upper-quartile house values in Sydney and Melbourne have fallen over 10% from their peaks.
- More affordable properties are proving resilient, with lower quartiles in Sydney and Melbourne down less than 6% and 4% respectively.
- National dwelling values decreased by 3.1% in the last three months.
- A shift in buyer types, with first-time buyers and owner-occupiers entering the market, is noted.
- Robust employment levels are seen as a critical factor preventing a broader housing market crisis.
High-end properties in Australia's major cities are experiencing significant price declines, while the more affordable segment of the housing market remains stable, according to new data. Upper-quartile house values in Sydney and Melbourne have fallen by more than 10% from their peaks.
Analysis from Cotality indicates that while the market correction is widespread, the most substantial drops are concentrated among expensive homes. These higher-value dwellings were the first to show a downturn and continue to record the largest cumulative falls. In Sydney, upper-quartile houses are valued at $2.1 million and above, while in Melbourne and Canberra, this threshold is around $1.2 million.
Nationally, dwelling values have decreased by 3.1% over the last three months, though they remain positive on a 12-month basis. High-end homes are more susceptible to sharp price movements due to their speculative nature and reliance on market sentiment.
Economist Peter Esho suggests the property market is showing signs of stabilization as budget-related uncertainty recedes. He notes a rotation of buyer types, with investors withdrawing and first-time buyers and owner-occupiers, who were previously priced out, now entering the market. Buying activity is particularly robust at lower price points, especially for properties below the caps for government first home buyer schemes.
In Sydney and Melbourne, house values in the lower quartiles have fallen by less than 6% and 4% respectively from their peaks. Despite broader economic pressures like rising oil prices, robust employment levels in Australia are seen as a key factor preventing the market correction from escalating into a systemic issue.
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