Homeowners in one Australian state are almost $33,000 poorer in just three months

The typical homeowner in one Australian State is $32,700 poorer as a result of interest rate rises and Labor’s Budget tax changes, which are denting consumer sentiment again.

NSW is by far Australia’s worst affected housing market with the average value plunging by 2.4 per cent to a still unaffordable $1.305 million during the June quarter, Australian Bureau of Statistics data released on Tuesday revealed.

Victorian homeowners and borrowers saw their mean home values plunge by 2.1 per cent or $19,600 over three months to $918,400.

In a two-speed housing market, Sydney and Melbourne led the downturn as overall mean national house and unit values fell by 0.7 per cent or $8200 to $1.1m, wiping off $34.1 billion from property values.

Canberra values dived by 1.3 per cent or $13,300 during that time to $981,700.

This period covered the Reserve Bank’s March and May interest rate rises, on top of February’s increase, and Treasurer Jim Chalmers announcing changes to negative gearing and capital gains tax concessions.

Consumer sentiment is falling again from already weak levels, with the Westpac-Melbourne Institute measure for September diving by 5.2 per cent to 84.4 points, which is well below the 100-level where optimists outnumber pessimists.

The worst reading in two months was taken after the ABS revealed inflation for July was higher than expected at 3.5 per cent, putting the annual consumer price index above the Reserve Bank’s 2-3 per cent target for the 12th straight month.

“A stronger than expected monthly CPI read in July has stoked fears that the RBA will raise interest rates further in coming months,” Westpac’s head of Australian macro-forecasting Matthew Hassan said.

“This has weighed on consumer expectations for finances and the economy. It has likely also added to unease about the continued weakening in housing markets.”

The measure asking 1200 respondents whether now was the time to buy a dwelling produced a dismal score of 85.5, marking a 10.7 per cent decline in one month.

Close to a third or 32 per cent of Australians surveyed expected property prices to decline over the next 12 months with 20 per cent of respondents seeing no change and 42 per cent expecting a rise, despite media coverage of a downturn.

The house price expectations measure was still in positive territory at 110.3 points, where optimists are the clear majority.

“Housing-related sentiment remains unsettled with interest rate rise concerns and the housing market downturn clearly weighing on assessments of ‘time to buy a dwelling’ but house price expectations largely unchanged and still notably firmer than during the last housing market downturn in 2022,” Mr Hassan said.

With Brisbane, Perth and Adelaide peaking later than Sydney, home values were still going up in most states of Australia during the June quarter, the ABS data showed.

The Northern Territory, Australia’s most affordable market, saw a nation-leading 4.4 per cent increase, adding $26,100 to the typical home and taking the average price to $614,400.

Tasmania, another affordable market, enjoyed a 2.2 per cent increase that saw home values rise by $15,500 to $733,200.

Mining-rich Western Australia also had a quarterly increase of 2.2 per cent, equating to a rise of $24,500 which took values to $1.124m - a level $23,300 above the national average.

Queensland is still a booming State with real estate values rising by 1.4 per cent or $15,800 over the quarter to $1.131m.

South Australian property prices also increased by 1.4 per cent, going up by $13,300 to $979,600.