After leading price growth over the pandemic, Australia’s most expensive homes are now driving the nascent property price bust.
According to new figures released by CoreLogic, the top 25% of homes by value fell by 0.5% in the April quarter, versus a 2.1% rise in values across the middle 50% and a 3.6% rise across the most affordable 25%:
According to CoreLogic Research Director Tim Lawless:
“We are seeing this trend more broadly, where the upper quartile of the market has softened out more visibly than the middle to lower end of the market,” he said.
“These softer conditions come after a stronger performance across the premium end of the market through the growth phase. Historically more expensive housing markets tend to lead the upswing, but also lead the downturn, which is what we seem to be seeing at the moment”.
These trends are also being replicated at the capital city level, with Australia’s largest and most expensive markets – Sydney and Melbourne – falling in value whereas the smaller and more affordable capital cities are still recording price growth:
These results make sense given expensive markets require bigger mortgages on average and are, therefore, more sensitive to changes in interest rates and/or lending standards.
There is also a thinner pool of buyers for expensive properties, which necessarily makes prices more volatile than the affordable end of the market.
