Australia’s housing downturn slowed in September, with national home values falling 1.4% last month.
September marked the fifth consecutive month of falling national home values, following a 1.6% decline in August, according to CoreLogic.
CoreLogic’s research director Tim Lawless said it was probably too early to suggest the housing market had moved through the worst of the downturn.
“It’s possible we have seen the initial shock of a rapid rise in interest rates pass through the market and most borrowers and prospective home buyers have now ‘priced in’ further rate hikes,” Lawless said.
“However, if interest rates continue to rise as rapidly as they have since May, we could see the rate of decline in housing values accelerate once again.”
Sydney’s monthly rate of decline eased to 1.8% in September from 2.3% in August, while Melbourne tapered from 1.2% to 1.1%.
The reduction in the rate of decline came alongside an improvement in other indicators.
“Auction clearance rates also trended upwards, albeit subtly, in September and consumer sentiment nudged a little higher as well on the back of strong labour market conditions,” Lawless said.
“We’ve also seen the flow of fresh listings continue to slide through the first month of spring, which is uncommon for this time of the year.”
Sydney continues to record the largest falls, with housing values now 9% or $104,300 below the city’s January 2022 peak.
According to CoreLogic, most cities continued to see a substantial buffer between current housing values and where they were at the onset of COVID in March 2020.
At the combined capital city level, housing values would need to fall a further 13.5% before wiping out the gains of the recent growth cycle.
That said, Melbourne, which saw a softer upswing than other regions, would only need to see a 4.3% fall in values before returning to pre-COVID levels.
“We are still seeing some resilience to value falls around the more affordable areas of Adelaide and Perth, as well as some regional markets associated with agriculture, mining and tourism,” Lawless said.