Regional home prices fell 0.34% in August and are down 1.2% over the quarter - the greatest quarterly fall seen since 2011, according to REA’s PropTrack Home Price Index.

Meanwhile, capital city prices fell 0.42% with Sydney the first and only market to see prices below their August 2021 levels. 

PropTrack Senior Economist Paul Ryan said rising interest rates are pushing property prices down.

“Higher interest rates continue to result in price falls across the country, which will persist throughout spring,” Mr Ryan said.

“We expect home prices to continue to fall across the country in 2022 and into 2023.

“Regional areas are now falling persistently but continue to be buffered by the affordability and lifestyle appeal that has led these markets to outperform over the past two years.”

ANZ economists Felicity Emmett and Adelaide Timbrell echoed a similar sentiment last week in their latest housing report.

“Our forecast for the cash rate to reach 3.35% equates to a reduction in borrowing capacity of nearly 30%,” Ms Emmett and Ms Timbrell said.

“This reduced ability to pay up will drive prices lower over coming months.”

Westpac economists expect national prices to decline 16% from peak to trough, closer to 18% for Sydney and Melbourne.

Property prices state-by-state breakdown for August

  • Sydney prices are down -0.49%
  • Melbourne prices declined by -0.47%
  • Brisbane recorded a -0.32% decrease
  • Adelaide saw its first price fall since 2019 with -0.12%
  • Perth saw an increase in property prices by a modest 0.04%
  • Darwin also recorded an increase of 0.14%
  • Hobart recorded a -0.56% decline
  • ACT prices are down -0.39%

Despite recent declines, property prices are still higher than pre-pandemic levels.

Regional areas remain up by almost 50% since March 2020 while capital city prices are up 26% over the same period. 

How does CoreLogic's property price data compare?

CoreLogic’s national Home Value Index (HVI) recorded a fourth consecutive month of decline in August, down -1.6%.

Regional dwelling values were down -1.5% compared with a -1.6% fall in values across the combined capital cities. 

According to the data, Sydney (-2.3%) and Brisbane (-1.8%) recorded the steepest declines in property prices while Darwin was the only capital to post an increase of 0.9%.

CoreLogic Research Director Tim Lawless expects the property downturn to continue through the remainder of the year, and possibly into 2023.

“It’s hard to see housing prices stabilising until interest rates find a ceiling and consumer sentiment starts to improve,” Mr Lawless said.

“From current levels, interest rates are likely to increase by another 75 basis points and there is a good chance advertised stock levels will accumulate through the spring selling season, providing more choice for buyers and adding further downwards pressure on housing values.”


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