Sydney and Melbourne house price falls accelerate

CoreLogic’s daily dwelling values index, which measures price growth across the five major capitals, fell by 0.22% in the week ended 16 June. This was the largest weekly decline since July 2020 during the depths of the pandemic:

CoreLogic weekly dwelling value change

Sydney and Melbourne drove the fall with values plunging 0.36% and 0.32% respectively over the week. Value growth also slowed to a crawl in Brisbane and Perth, whereas it remained strong in Adelaide:

Weekly house price change

So far in June, values have fallen by 0.27% with Sydney (-0.61%) and Melbourne (-0.44%) suffering heavy falls. By contrast, values have risen across the other major capitals:

Monthly house price change

Quarterly dwelling value growth has turned negative (-0.1%) at the 5-city level, driven by falls across Sydney (-1.8%) and Melbourne (-1.2%). Again, values have risen strongly across the other major capitals:

Quarterly house price change

Finally, since the beginning of the year, dwelling values have risen by 1.1% across the five major capitals, with strong growth across Brisbane, Adelaide and Perth, which were mostly offset by declines across Sydney and Melbourne:

2022 Australian house price movements

With the Reserve Bank of Australia (RBA) tipped to aggressively lift interest rates over the next year, Sydney and Melbourne will continue to lead the nation’s housing market lower.

How big the correction goes will depend on how aggressively the RBA hikes rates. If the RBA hikes as aggressively as financial markets are tipping, then expect a full blown price crash.

Unconventional Economist

Comments

    • Resetting a housing market he overinflated. Or too use plainer language, let’s hit hard those with home loans and ruin recent purchasers because I built a debt trap with low rates and money printing.
      Lucky Jerome keeps his $USD200k salary and based on his predecessor he’s probably anticipating quite a few million per year in speaking fees.

  1. pfh007.comMEMBER

    So when we turn a basic requirement like shelter into a speculative financial asset it behaves like a speculative financial asset with changes in price amplified by the amount of leverage involved?

    Gosh who would have thought that!

    I guess now that we know this and realise turning it into a highly leveraged speculative financial asset was a dumb idea we will stop doing it.

    Nah that would be too obvious.

    Instead we will howl and shriek and demand that it be kept on life support whatever the cost.

    Time to fix the problem and that means tightly regulating bank credit allocation towards housing with an explicit restriction on credit for purchases of the existing housing stock.

    Easier access for new construction is essential, especially as Albo will be opening the borders to cheap labour very soon to increase unemployment and reduce upward pressure on wages.

    • Know IdeaMEMBER

      When you start manipulating the stock and bond markets with funny money why not do the same with the property market? Those making the decisions will have moved on before the consequences are realised.

      Once again, the proletariat is being willingly led to the slaughter by greedy uncaring elites. A Brave New World indeed.

    • No the recession in this overprice hole will result in emigration. The only people who will come here are refugees, because they stimulate the economy, not. Service industry jobs are the first thing to go as discretionary spending tightens. More pressure on houses as small business failures trigger house liquidations as houses are used as security. It’s going to be carnage. The only upside is the rentiers have to reset their price expectations.

      • pfh007.comMEMBER

        Robert,

        That result is avoidable.

        That result is only likely to happen if there is no reform and the monetary policy maniacs and bankers mates insist that there can be no changes to our private bank centered monetary system.

        As bankers credit contracts as interest rates rise the government can:

        1. Cut taxes

        2. Fund those tax cuts with bonds sold direct to the RBA

        3. Allow non banks and the general public to operate reserve accounts at the RBA to end the bank monopoly.

        Nothing radical or difficult about any of the above except that it will upset the banker cartel.

        The increase in non-debt based money will allow the bankers debt contracts to be repaid without inflation.

        I appreciate that the bankers have done great job of convincing much of the public there is no alternative to a banker cartel and monopoly over the public central bank but that is the only real barrier.

        A bit of banker propaganda.

    • I’m interested in this, but its not easy because I want to fit in with the local people.
      I will need to grow a mullet, talk with a twang, remove a few teeth, and get married to my cousin.
      It takes time Bill.

          • Rockingham is ok these days.
            True story…when they finally put state housing into Margaret River they filled them full of people moved from Rockingham. Worked for both towns as it cleaned Rockingham up and added diversity to Margaret River (which now can be a sh!tshow).

    • no, don’t come here.
      we are full.
      too much congestion, services under stress, prices too high already.
      if greedy business really need skilled workers let greedy business train local people.

        • mining companies over here do a lot of fifo … not a good lifestyle.
          years ago I worked in mining for many years, no fifo in those days … unless you worked for argyle diamonds.
          in those days you just had to have your qualification preferably with some experience in a heavy industrial or mining background. the mining company would then train you up on their stuff, same for other industry.
          today, if you look at a labour hire company {mining companies don’t hire directly anymore or rarely do) recruiting, list is a ‘mile long’ of the must have and desirable requirements to get to first base.
          also most of these jobs are shutdowns or contruction work … again not desirable.

          every time there is some kind of ‘work boom’ over here, there’s a skill shortage.
          the problem is government allows greedy business to bring in workers, just in time, whenever a greedy business bleats ‘skills shortage’ .

  2. Goldstandard1MEMBER

    The Great Australian Housing Crash Has indeed begun. A waterfall starts with one drop. This is probably drop 100 and the gush is almost here.

  3. You folks are sooooo negative. Leith’s charts are just upside down. tut tut. Aussie property NEVER goes down. My 21 year old fin advisor and crypto pumper confirmed that in his lifetime it has never gone down. Its against the law.

    • Good sir, would you like to buy some rare and appreciating tulips. They have these marvelous streaks that I’ve been told are very much not a viral infection that will kill the bulb!

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