House prices in Sydney, Melbourne have largest single-month decline in four years
Home values have fallen at their fastest monthly rate in nearly four years as a dip in prices spreads to more of Australia's major cities.
A property price downturn is spreading across the nation as the market records the largest single-month decline in home values in nearly four years.
Australia’s two largest housing markets led a nationwide drop in prices, with Sydney and Melbourne home prices falling by 1.4 per cent and 1.2 per cent respectively in July.
Dips were also recorded in the previously booming state capitals of Brisbane and Adelaide, where prices were down 0.6 per cent and 0.2 per cent respectively, according to Cotality’s latest Home Value Index.
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By continuing you agree to our Terms and Privacy Policy.Values were down 0.7 per cent nationwide, the largest single-month drop since December 2022, the data released on Monday showed.
“For buyers who remain in the market, lower competition and elevated stock levels (when compared with the start of the year) mean greater choice and more negotiating power,” the property analytics firm said.
But first home buyers might benefit little from the downturn, which has been led by properties at the top end of the market.
Homes in the top quarter of the market lost 3.2 per cent of their value in the three months to July, compared to a 0.3 per gain in the lower-price tier.
For those looking beyond metropolitan areas, the regional market also dropped 0.2 per cent in the month - the first such decline since January 2023.
“There remains a mismatch between the pricing expectations of buyers and sellers,” Cotality head of research Gerard Burg said.
Cooling buyer demand has been shaped by several factors, including three interest rate hikes that have limited people’s borrowing power.
Consumer sentiment has also been soured by high living costs and uncertainty caused by the ongoing Iran conflict.
“We have observed a deterioration in the flow of new listings across the country in recent weeks, led by Sydney, as potential vendors assess a weak market and choose to wait until conditions improve,” Mr Burg said.
In contrast, rental prices have continued to rise due to low vacancy rates,
Median rents had risen by over $200 per week in the last five years nationally, Mr Burg said.
“Despite the tight market conditions, there are question marks about how much further rents can rise,” he said.
