Sydney and Melbourne house prices plunge

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CoreLogic’s daily dwelling values index, which measures price changes across the five main capital city markets, declined by 0.11% in the week ended 12 May:

CoreLogic weekly dwelling values index

The decline was driven by Sydney (-0.26%) and Melbourne (-0.22%), which both recorded heavy price falls. By contrast, the other major capitals each recorded price rises, with Adelaide leading:

Weekly house price movements
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Over the quarter, Sydney (-0.8%) and Melbourne (-0.3%) both recorded falling dwelling values, but were more than offset by solid-to-strong rises across the other major capitals, thereby driving values up 0.8% across the combined 5-city level:

Quarterly house price movements

Similarly, since the beginning of the year Sydney and Melbourne dwelling values have fallen by 0.1%, more than offset by strong growth across Brisbane (+9.0%) and Adelaide (+8.6%), and solid growth in Perth (+3.3%):

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2022 Australian house price movements

With interest rates now rising, and Sydney and Melbourne having the nation’s most expensive homes and indebted households, both cities should experience accelerating price falls in the months ahead.

How fast and far prices fall will depend on how aggressively the Reserve Bank hikes interest rates.

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About the author
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.