Australian House Prices Fall for Sixth Consecutive Month in October

A billboard advertises a new home for sale in Melbourne, Australia, on Sept. 6, 2022. (William West/AFP via Getty Images)

Home values across Australia have experienced their sixth consecutive drop in October, with Brisbane leading the downward trend.

According to real estate data provider CoreLogic, national dwelling values dipped another 1.2 percent in October, following a 1.4 percent drop in September and a 1.6 percent decrease in August.

House prices in Brisbane dropped at the fastest pace, with a two percent decrease for the month, followed by Sydney at 1.3 percent, Tasmania at 1.1 percent, Canberra at one percent and Melbourne at 0.8 percent.

While the pace of falls has eased in the past several months, CoreLogic’s research director Tim Lawless said it was too early to tell whether sharp price declines would end.

“With Australian borrowers facing the double whammy of further interest rate hikes along with persistently high and rising inflation, there is a genuine risk we could see the rate of decline re-accelerate as interest rates rise further and household balance sheets become more thinly stretched,” he said.

However, Lawless said the housing market had so far been cushioned by fewer house listings than usual, a tight labour market, substantial savings buffers and significant numbers of households on fixed-rate home loans.

A general view of apartments in Sydney, Australia, on Sept. 7, 2022. (Lisa Maree Williams/Getty Images)

Meanwhile, PropTrack senior economist Eleanor Creagh said in comments obtained by AAP that while further interest rate rises would continue to bring house prices down, there was evidence that the declining trend was starting to slow down.

“The Reserve Bank of Australia appears done with frontloading the tightening cycle, slowing the pace of its hikes,” she said, pointing to the 0.25 percent rate hike in September, which was half of the rises in previous months.

“This may give prospective buyers a confidence boost. Evidence buyers were taking advantage of the less competitive conditions.”

At the same time, Creagh said the tight rental market, low unemployment, and inadequate housing supply would keep housing values at high levels.

Rental Prices Keep Increasing in October

While house prices continued to fall across the country, national rental prices maintained their upward trend in October, with a growth of 0.6 percent led by a 1.1 percent rise in unit rents and a 0.5 percent increase in house rents.

CoreLogic said there was a higher demand for units as renters were looking for more affordable options, and overseas migrants tended to favour inner city dwellings.

Among the capital cities, Melbourne and Sydney recorded the highest annual rises in unit rents, with prices up 13.7 percent and 13.4 percent, respectively, in the past 12 months.

However, rental growth has been slowing down, with the quarterly rate of national rental growth dipping from three percent in the May quarter of 2022 to 2.1 percent in the three months to October.

“A gradual slowdown in rental growth in the face of low vacancy rates could be an early sign that renters are reaching an affordability ceiling,” Lawless said.