According to a new analysis from property research firm CoreLogic, national home values have fallen by 7.4 per cent from their peak, with a 9.2 per cent reduction across Australia’s combined capital cities spearheading the drop.
Australia’s combined regional markets, however, have faired better since the onset of the housing downturn, with values declining by 2.5 per cent peak to trough.
Despite home prices in Sydney and Melbourne suffering considerable peak-to-trough declines of 13.9 per cent and 10.3 per cent, respectively, their regional markets have withstood the full brunt of the downturn, with declines of 4.1 per cent in regional NSW and 0.8 per cent in regional Victoria.
CoreLogic has reported a similar trend in the Northern Territory, with a peak-to-trough drop of 27.5 per cent in Darwin far exceeding the 7.9 per cent decline outside of the capital.
However, the same can’t be said in Western Australia, where regional home values have plummeted by 41.6 per cent since their peak, compared to an 18.1 per cent fall in Perth.
Residential property prices in Brisbane and Adelaide have also experienced softer peak-to-trough declines (1.6 per cent and 0.5 per cent, respectively) than in their regional markets, with values slipping by 4.9 per cent in regional Queensland and 3.4 per cent in regional South Australia.
A bittersweet slide
Reflecting on the overall trend in the housing market, CoreLogic research analyst Cameron Kusher said that the extent of the fall in prices would be a bitter pill to swallow for those who purchased a home at the market’s peak.
“While a values percentage fall indicates how the market is faring, seeing the actual value of the declines is a stark reminder of the actual losses,” he said.
“While the recent declines in markets like Sydney and Melbourne can be put in context of the significant increases over recent years, this is little comfort for home owners that purchased at or near the peak of the market.”
Mr Kusher expects the price declines to continue over the coming months and place further pressure on household wealth.
“While values are falling, the debt held against these properties is unlikely to be reducing at the same pace, resulting in wealth declines for holders of residential property.”
The analyst added that despite raising concerns for some home owners, the fall in property prices would be welcome news for first home buyers.
“With advertised stock levels remaining high and mortgage rates tracking around the lowest level since the 1960s (and potentially moving even lower later this year), active buyers are back in the driver’s seat to take advantage of improved housing affordability and the low cost of debt.”
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Charbel Kadib is the news editor on the mortgages titles at Momentum Media.
Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.