Melbourne is leading the downturn, with values falling in 93 per cent of suburbs
The property market crunch is in full swing, with home values falling in more than 90 per cent of suburbs in some major cities, exclusive new data has revealed.
PropTrack’s latest Quarterly Home Values report has shown a significant downturn for values over the last three months, felt especially in top end markets, with houses declining in value by up to $300,000 in that time period in some cases.
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A perfect storm of economic factors have contributed to the current correction, with federal budget tax changes, higher interest rates and global economic turmoil doing the damage, according to REA Group economist Anne Flaherty.
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“The budget reforms have structurally changed the market at a time when it was already weakening,” Ms Flaherty said, adding that the current downturn could carry on much longer than previous market corrections.
“There is still so much uncertainty. People are trying to wrap their heads around the budget changes … they think prices will fall and they want to buy at the bottom of the cycle, so they’re waiting on the sidelines.”
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REA Group economist Anne Flaherty
In Sydney, 91 per cent of suburbs saw house value declines over the quarter. Nearly 200 suburbs saw house values fall by more than $100,000.
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Meanwhile, Melbourne led the way, in a bad way, with 93 per cent of suburbs losing value in the past three months, as the current market crunch is on track to be its worst in at least a decade.
There are now just 29 Melbourne suburbs where the typical house value is growing, and only 18 of them recorded a gain of more than 0.5 per cent.
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But not all capital cities are faring as badly as Sydney and Melbourne.
Brisbane has experienced value falls in just 22 per cent of suburbs, with the worst affected at the prestige end of the scale. House and unit markets still both experienced overall growth for the quarter.
Sydney has seen house values fall in 91 per cent of suburbs. Picture: Damian Shaw
Further north, Townsville remains one of the nation’s hottest property markets, with just two of 66 suburbs experiencing quarterly price falls.
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Meanwhile, Adelaide’s strong recent growth has finally slowed, but the city only saw value falls in less than 30 per cent of suburbs over the three months.
Ms Flaherty warned there was still a chance for another interest rate hike in August, a “lot of uncertainty” ahead and a likelihood the federal budget’s changes to tax settings could make negative forecasts even worse this year.
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