Australian home values fell 1.6% in August, with the housing downturn accelerating and spreading further throughout the country, according to CoreLogic. 

August marked the fourth consecutive month of decline for national home values and represented the largest month-on-month decline since 1983. 

Every capital city apart from Darwin was in a downturn, with a similar scenario playing out across the regions except for regional South Australia.  

Sydney home values fell a further 2.3% in August, while Brisbane home values fell 1.8%.  

CoreLogic Research Director Tim Lawless said Brisbane’s shift into decline had been acute after almost two years of sustained growth due to record high internal migration and relative affordability.   

“It was only two months ago that the Brisbane housing market peaked after recording a 42.7% boom in values,” Lawless said. 

“Over the past two months, the market has reversed sharply with values down 1.8% in August after a 0.8% drop in July.”  

CoreLogic found the fall in regional dwelling values was catching up with the capital cities despite recording significantly stronger appreciation through the upswing.  

Regional home values were down 1.5% in August compared with a 1.6% fall in values across the combined capitals.   

Regional home values surged more than 40% compared with a 25.5% rise for the combined capitals between March 2020 and January 2022. 

“The largest falls in regional home values are emanating from the commutable lifestyle hubs where housing values had surged prior to the recent rate hikes,” Lawless said.   

“Over the past three months, values are down 8% across the Richmond-Tweed, 4.8% across the Southern Highlands-Shoalhaven market and 4.5% across Queensland’s Sunshine Coast.” 

Looking at the annual trend, home values across the combined capitals eased back to just 2.2% after moving through a peak annual growth rate of 21.3% in November last year. 

Sydney and Melbourne home values were 2.5% and 2.1%, respectively, below the level recorded this time last year.    

That said, home values across all capital cities and rest-of-state regions, except for Melbourne, remained 15% or above the levels recorded in March 2020. 

This meant most homeowners had a significant equity buffer before their home was likely to be worth less than what they paid. 

“A 15% peak to trough decline would roughly take CoreLogic’s combined capitals index back to March 2021 levels,” Lawless said.   

“Additionally, many homeowners would have had at least a 10% deposit and paid down a portion of their principal, the risk of widespread negative equity remains low.” 

Lawless expected the downturn would continue to play out through the remainder of the year, and possibly into next year.   

“It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” he said. 

“From current levels, interest rates are likely to increase by at least another 75 basis points and there is a good chance advertised stock levels will accumulate through the spring selling season, providing more choice for buyers and adding further downwards pressure on housing values.”