Home values slowed down further in May, with Corelogic’s home value index recording its first national fall since September 2020.  

National home values recorded a 0.1% month-on-month decline in May, as a combination of higher interest rates, rising inventory levels and lower sentiment dampen conditions. 

Sydney and Melbourne home values declined 1% and 0.7% in May, marking the biggest monthly falls in the country.  

At the other end of the spectrum, Adelaide and Brisbane home values rose 1.8% and 0.8% during the month.  

“There’s been significant speculation around the impact of rising interest rates on the property market and last month’s increase to the cash rate is only one factor causing growth in housing prices to slow or reverse,” CoreLogic’s Research Director Tim Lawless said.  

“It is important to remember housing market conditions have been weakening over the past year, at least at a macro level.” 

Source: CoreLogic

On a quarterly basis, Corelogic recorded a 1.1% rise in national home values during the three months to May. 

Melbourne and Sydney recorded home value declines during the quarter, down 0.8% and 1.4% respectively.  

Adelaide and Brisbane posted quarterly growth of more than 4% during the May quarter, while Perth, Darwin and Canberra recorded around 2% growth.  

Lawless said the quarterly rate of growth in national dwelling values peaked in May 2021, shortly after a peak in consumer sentiment and a trend towards higher fixed mortgage rates. 

“Since then, housing has been getting more unaffordable, households have become increasingly sensitive to higher interest rates as debt levels increased, savings have reduced and lending conditions have tightened,” he said.  

“Now we are also seeing high inflation and a higher cost of debt flowing through to less housing demand.”

Source: Corelogic