Property market plummets as pricing downturn spreads
Home values have suffered their biggest fall in a single month since 2022, as Australia’s housing downturn spreads beyond Sydney and Melbourne.
The drop was driven by the tumbling worth of high-end homes, prompting property experts to warn of a “two-speed” market, as entry-level prices remained relatively resilient.
Australia’s housing market continues to fall in most of the major cities. Supplied
Sydney was hardest hit, suffering a “very steep decline” of 1.4 per cent in July alone, according to fresh data from Cotality.
The median value however remains above $1.2 million, while a 1.2 per cent drop in Melbourne saw median values drop to $797,354.
However, markets that were previously proving resilient to falling prices also fell.
Perth home values were up across July (0.1 per cent) but down through the quarter (-0.3 per cent), while Brisbane (-0.6 per cent), Adelaide (-0.2 per cent) and Canberra (-1 per cent) all fell in July after experiencing runaway prices year-on-year.
Darwin was the outlier, growing 0.8 per cent across the last month.
The downturn has been driven by three main factors; three rate rises to start the year, the Albanese government’s budget that abolished tax breaks for investors, and the effects of the Iran war pushing up both buyer anxiety and supply chain costs.
It was the fourth consecutive month property prices fell; the Iran war started in February, while the federal budget was handed down in May.
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The data showed the biggest falls were among the most expensive properties, while the bottom end of the market actually increased 0.3 per cent.
Director of Azura Financial, Tom Hawley, said the property market would eventually find a floor.
“It’s a bit of a two-speed market. The family homes, and the premium market, is getting really heavily affected because it’s more impacted by confidence and affordability. But the lower end of the market seems to be somewhat resilient,” Hawley told Today.
“The change in policy from the government - in terms of making housing more affordable - is certainly working, which was their intention, but maybe not working as well for the affordable price points.
“Sydney was down 1.4 per cent in July, that’s a very steep decline. The property market will find a floor eventually.
“With all the uncertainty around at the moment, it’s hard to make a big decision with regards to buying a property.”
Deputy Liberal leader Jane Hume has blamed Labor’s controversial changes to property tax in the budget for the downturn. Hilary Wardhaugh/Getty Images
Overall, dwelling values across the nation’s capital cities dropped 0.9 per cent through July, 0.2 per cent in regional Australia and 0.7 per cent nationwide to $928,421.
That is the largest drop since December 2022, and the steepest fall during the Albanese government’s tenure.
Auction clearance rates remain below 55 per cent for the tenth consecutive week. Buyers remain wary of buying before prices bottom out, while potential sellers hold back.
Acting opposition leader Jane Hume lashed the government’s intervention in the property market.
“This is a trifecta of failure in housing that is of Labor’s making; fewer houses, higher rents and uncertainty in our housing market,” Hume said in Brisbane on Monday.
“If they had told Australians prior to the election that what they wanted to do was tank the housing market, I think that Australians might have looked at Labor in a completely different way.”
Cotality measures property values, quantifying the worth of a home, rather than property prices, which reflect average purchase prices on dwellings that have settled.
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