Australian property values are starting to 'slowdown', which is expected to carry into 2022 according to CoreLogic's latest release.

This is attributed to affordability constraints, mortgage rates 'bottoming out', and more listings taking the pressure off the competitive market conditions.

Since the median dwelling value's peak rate of growth in March 2021 (2.8% or $16,000), the monthly growth rate has settled to 1.5% or $10,000 according to CoreLogic.

The reduction is 'most prominent' for the top 25% of property values, being properties valued at around $1 million or more.

While the growth rate is slowing on a national level, the growth cycle of each capital city revealed differences in momentum according to CoreLogic's latest home value index.

Where has the growth rate of dwelling values slowed the most?

Dwelling values continued to rise in most capital cities, but some recorded a slower growth rate than others.

Particularly, the dwelling value change in Perth was -0.1%, which is a 'virtually flat' reading down from February's growth rate of 2.7%.

This may be due to extended state border closures, affordability constraints for first home buyers, and an uptick in new listings according to CoreLogic's findings.

Monthly dwelling value growth was also down in Darwin to 0.4%; this is lower than the peak growth rate of 2.7% recorded in April and May.

Sydney also recorded one of the fastest slowdowns in its monthly value growth rate, down from its peak of 3.7% in March to 1.5%; this is attributed to the inherent 'volatility' of the market, affordability constraints, and a high level of new listings.

Hobart's monthly increase in dwelling values also dropped to 2%, which is down from its peak of 3.3% in March, which is still 'very high' and equivalent to a $13,274 median value increase.

Canberra's housing market has shown signs of slowing since its peak of 2.6% in July, down slightly from 2% last month to 1.9%. 

Despite rising slightly from last month, Melbourne also recorded a slowed monthly growth rate of 1%, down from its peak of 2.4% in March.

Which capital cities are escaping the slowdown?

Despite the national growth rate beginning to stagnate, a few capital cities are still seeing values rise at faster paces than previously recorded.

Brisbane's property prices are 're-accelerating', recording the highest monthly increase since November 2003 - 2.5%.

This can be attributed to strong interstate migration, normalised remote work, and low exposure to COVID-19.

Adelaide also saw its highest monthly increase since 2003, rising by 2%, led by a 2.2% rise for houses and a 1% growth rate for units.

What does the future hold for the housing market?

Monthly growth rates are expected to keep declining throughout next year due to a combination of factors, including a tighter credit environment, more listings available, and affordability constraints putting downward pressure on demand according to CoreLogic.

However, despite slowing down nationally, these rates are still 'relatively high' when compared to the decade average of monthly movement - 0.4%.

With the latest inflation reading coming in 'strong', expectations of a tighter monetary environment could be as soon as 2022.

This will be important to follow because a higher cash rate and mortgage rates will likely put downward pressure on property prices according to CoreLogic.

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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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