Apartment and unit values fell slightly throughout Australia during October, however they have continued to fare better than house values.  

CoreLogic found that unit values declined 0.8% in October, taking the median value to $598,417. 

CoreLogic Economist Kaytlin Ezzy said house values continued to be more sensitive to rising interest rates compared to units.   

“As the larger monthly increases in house values recorded over the final quarter of last year fall out of the annual calculation, we’ll likely see the annual growth trends intersect before the performance gap between house and unit values inverts in favour of units,“ she said.   

In comparison, national house values fell 1.3% over the month. 

Unit values were now 1.4% lower than the same time last year.  

As the downward phase of the cycle continued and falling values have become more widespread, the quarterly pace of decline has eased slightly.  

“Several factors may have helped influence this deceleration,” Ezzy said.  

“Not least the smaller increases in the official cash rate between October and November, as well as a lack-lustre spring selling season.” 

Source: CoreLogic

While it is likely values across Australia’s unit market will continue to decline over the coming months, a few tailwinds have started to emerge.  

“The de-deceleration in the quarterly growth trend could be an indication that we have moved passed the worst value declines,“ Ezzy said. 

“However, it’s still early days, and any change to the outlook for interest rates could see declines accelerate once more. 

“Additionally, Australia’s labour market remains extremely tight, with the unemployment rate falling to 3.4% in October.  

“Coupled with the strong wage growth seen over the September quarter, this should help keep a lid on distressed or forced sales.”  

However, Ezzy said as more borrowers moved into uncharted territory, there could be an increasing number of households finding it harder to service their loans, 

“Arguably, household budgets have already been stretched by persistently high non-discretionary inflation, and many may find it hard to accommodate higher mortgage repayments,” Ezzy said.