Aussie August housing values continued slide

Housing market data to the end of August has confirmed a $0.1 trillion combined value residential real estate drop, following a 2022 trend from $9.95 trillion in June to $9.8 trillion in July.

By spring this year, every capital-city dwelling market except Darwin saw a fall in values, property data and analytics provider CoreLogic explained.

Dwelling values in Australia are 4.7 per cent higher over the past 12 months, though — but down from a cyclical peak of 22.4 per cent recorded in the 12 months to January 2022.

At the national level, properties are taking longer to sell, the results also found. 

In the three months to August, the median days on market was 33, up from a recent low of 20 days over the three months to November, CoreLogic outlined.

Another discovery was sales volumes trending lower as buyer demand slows. CoreLogic estimated in the 12 months to August there were 574,263 sales nationally, down 2.3 per cent compared to the previous year.

Other highlights included lending for property purchases dropping 8.5 per cent in July, investor housing finance falling 11.2 per cent in the month, while total owner-occupier lending fell 7.0 per cent.

APRA data also showed the amount of potentially risky mortgage lending has generally trended lower through the June quarter of 2022, with the exception of the portion of lending on interest-only terms, CoreLogic stated.

By state, NSW comprises the largest value of residential housing stock at 39.5 per cent, down from a recent record high in October last year when NSW comprised 41.4 per cent of the value of Australia’s housing stock. 

Victoria has also seen a reduction in the state’s “share” of housing value, reducing from 29.5 per cent of the value of housing stock in January 2020 to 26.9 per cent of stock in August. 

Queensland has seen the biggest increase in the share of housing value, rising from 14.5 per cent of Australian housing stock at the onset of COVID in Mach 2020 to 16.7 per cent in August.

Upwards pressure not enough to offset fall

Speaking exclusively to Mortgage Business about the continued Australian residential property drop, CoreLogic research director Tim Lawless said: “Our estimate of the value of Australia real estate peaked in April, at $10.017 trillion and has since declined to $9.666 trillion by the end of August.

“The value of residential housing across Australia remains $2.48 trillion higher than the pre-COVID levels, based on a comparison with March 2020 levels.

“The overall value of housing is influenced by both changes in the value of housing stock, but also the number of Australia dwellings (which is continuing to rise). 

“Although there will be some upwards pressure on the value of housing via a rise in completed dwellings, this isn’t likely to be enough to offset the impact of falling home values, with CoreLogic’s national dwelling value index down 3.5 per cent since peaking in April earlier this year.”

More challenging sale conditions

In terms of more protracted residential property sale times, Mr Lawless explained: “The fact that homes are taking longer to sell should come as no surprise, with this trend towards longer selling times being accompanied by larger rates of vendor discounting and lower auction clearance rates.

“Selling conditions are becoming more challenging due to less demand rather than a substantial rise in freshly listed stock coming on the market. 

“Nationally the volume of homes sales was down 14.8 per cent over three months ending August compared with the same period a year ago.

“With the selling environment becoming more challenging, vendors will need to make sure they have realistic price expectations, be prepared to negotiate and ensure they have a strong marketing campaign behind the property.” 

[Related: Australian home values top $10 trillion]