CoreLogic has released its daily dwelling values index for 31 May, which measures the change in dwelling prices across the five major capital city markets.
At the 5-city level, Australian dwelling values fell by 0.4% in May, which was the first monthly decline since September 2020:
The fall in prices was driven by Sydney and Melbourne, where prices fell 1.0% and 0.7% respectively over May. By comparison, price growth was positive across the other major capital cities:
As shown in the next chart, dwelling values have fallen for four consecutive months in Sydney and three consecutive months in Melbourne:
Over the May quarter, dwelling values have fallen by 1.4% across Sydney and 0.8% across Melbourne. However, values were still 0.3% higher at the 5-city level thanks to strong growth across the other major capitals:
So far in 2022, Sydney and Melbourne have recorded dwelling value falls of 0.9% and 0.6% respectively. However, these have been more than offset by strong growth across Brisbane (9.2%) and Adelaide (9.7%), and solid growth across Perth (3.6%). Accordingly, prices at the 5-city level have risen 1.4%:
It is clear from the above that a house price correction is underway across Sydney and Melbourne, which are Australia’s largest and most expensive housing markets.
How deep the correction goes will depend on how aggressively the Reserve Bank lifts interest rates.
