CoreLogic has released research examining the current decline in Australian dwelling values versus prior episodes:
At a national level, since 1980 there have been eight separate housing market downturns (as highlighted in the first chart). The current downturn which commenced after October 2017, has seen values fall by -6.8%. Although that may not seem like a substantial downturn, since the early 80’s there have only been two downturns which were larger, 2008-09 and 1982-83. National housing market downturns have also been generally fairly short-lived with the current downturn of 16 months already the second longest with the 2010-12 decline running two months longer than the current downturn.
The decline in values throughout the current downturn has been larger across the combined capital cities, with values now -8.6% lower. By next month, assuming the falls continue, this will be the largest downturn in the combined capital city index any time since 1980. The current downturn is also closing in on being the longest. With values having peaked in September 2017, they have now been falling for 17 months with the previous longest period of decline coinciding with the last recession, running for 20 months between 1989 and 1991.
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Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
