Australia has weakest housing market since 2008, latest index shows
Property prices in Australia fell by 4.8% nationally in 2018 to a median value of $532,327, while the rate of decline worsened consistently over the year, the latest real estate index shows.
It means that the housing market as a whole has seen the weakest market conditions since 2008, according to the index report from CoreLogic.
The data also shows that nationwide prices fell by 2.3% quarter on quarter and by 1.1% month on month in December while on a regional basis they were down 0.2% month on month, down 0.5% quarter on quarter and down 0.2% year on year.
When it comes to the capital cities, prices fell year on year by 8.9% in Sydney to a median of $808,484, by 7% in Melbourne to $645,123, by 4.7% in Perth to $446,011 and by 1.5% in Darwin to $416,149.
The strongest market was in Hobart in Tasmania where prices increased by 8.7% year on year to $457,523, while prices also increased by 3.3% in Canberra to $601,275 and by 1.3% in Adelaide to $434,924.
According to CoreLogic head of research Tim Lawless, the downturn in Australian housing conditions accelerated through 2018, driven by consistently larger quarter on quarter declines in Sydney and Melbourne.
However, he pointed out that the slowdown goes well beyond the correction in Sydney and Melbourne with other factors including a reprisal in Perth’s rate of decline and slowing conditions across the remaining capital cities and most regional markets.
‘Although Australia’s two largest cities are the primary drivers for the weaker national reading, most regions around the country have reacted to tighter credit conditions by recording weaker housing market results relative to 2017,’ Lawless said.
The two exceptions were regional Tasmania, where the pace of capital gains was higher relative to 2017 resulting in a nation leading 9.9% gain in values over the 2018 calendar year, and Darwin, where the annual rate of decline improved from a decline of 8.9% in 2017 to a fall of just 1.5% in 2018.
Although Sydney and Melbourne recorded the weakest conditions, the peak to current declines are much less severe relative to Perth and Darwin where values have been falling since the middle of 2014.
Sydney values are now 11.1% lower relative to the July 2017 peak and Melbourne values are down 7.2% since peaking in November 2017. The downturn has been running much longer in Perth and Darwin, resulting in cumulative falls of 15.6% and 24.5% respectively.
At the end of 2018, Sydney values were back to where they were in August 2016, while Melbourne values are back to February 2017 levels. Perth values are back to levels last seen in March 2009 and Darwin dwelling values are at October 2007 levels.