One of the country's strongest property markets of recent years is now leading the slide. Brisbane recorded the sharpest monthly fall in home values of any capital in September, down 1.5%, according to Cotality's latest Home Value Index — edging past Sydney's 1.4% fall in what the data firm described as a sharp shift for "one of the strongest performing housing markets".
Nationally, the index fell 1.1% for a sixth straight month of declines, leaving dwelling values 5.2% below their record high in March. Every capital except Darwin, up 0.4%, went backwards in the first month of spring. "97% of capital city suburbs were down in value over the three months to end of September, highlighting the broad-based scope of this negative housing cycle," Cotality's research director Tim Lawless said.
For Brisbane, the numbers land hard. The median home is now worth $1.05 million, the Guardian reports, down $59,000 since May — after values surged 18% over the previous 12 months — and every suburb in the city recorded lower prices than in June. Sales have fallen even faster than prices: estimated home sales over the past three months were down 27.2% on a year earlier, the steepest drop of any capital, ahead of Sydney and Perth.
Mr Lawless said the slump in turnover had consequences well beyond the property market. "The sharp drop in sales has implications for the broader economy, with lower sales likely to hit some retail segments as well as stamp duty revenues for state governments," he said. Homes are also sitting longer: "Capital city homes are now taking a median of 39 days to sell compared with 23 days a year ago, resulting in an accumulation of advertised supply." New listings across the capitals were 9.2% lower than a year ago, but total inventory was up 23.1% because properties are selling more slowly.
Cotality puts the downturn down to a combination of affordability constraints, higher interest rates, elevated living costs and weak consumer sentiment — and the rate pressure has just intensified. The Reserve Bank lifted the cash rate by 25 basis points to 4.60% on Tuesday — its fourth hike this year — with governor Michele Bullock saying the board had considered holding amid an unexpectedly weak housing market before deciding to lift. Comparison site Canstar estimates this year's four hikes have cut $47,400 from the borrowing capacity of someone on the average full-time wage of $108,650.
Economists now expect the fall to run further. AMP chief economist Shane Oliver said the Cotality figures supported forecasts of prices falling at least 10% nationally. "Rate hikes, tax hikes and poor confidence are the big drags but rising distressed listings with rate hikes and rising unemployment do risk a deeper fall of around 15%," he said. Ms Bullock has warned falling prices would probably worsen housing supply by making new construction unprofitable.
Elsewhere, Sydney values are now 8.6% below their peak and Melbourne recorded a milder 0.7% monthly fall, while regional markets continue to hold up better than the capitals, with regional values up 5.6% over the year against a 1.8% annual fall across the combined capitals.