The CoreLogic daily dwelling values index, which measures home values across Australia’s five major capital city markets, has now fallen 7.1% from its May peak following the Reserve Bank of Australia’s (RBA) aggressive monetary tightening:
Australian dwelling values down 7.1% from peak.
As shown above, the decline in values has been driven by the ‘big three’ capital city markets of Sydney (-10.7%), Brisbane (-7.1%) and Melbourne (-6.7%).
Data including the smaller capital cities and regions is only updated monthly, and this showed that values nationally were down 6.0% from peak at the end of October, with the combined capital cities down 6.5% and the combined regions down 4.9%:
CoreLogic: Australian dwelling values down 6.0% in October.
CoreLogic has also released its November Housing Chart Pack, which shows that the total value of Australian real estate was $9.50 trillion dollars in October, based off 10.8 million dwellings:
CoreLogic: Australian dwellings valued at $9.5 trillion in October 2022.
This is down from the record high $9.98 trillion value posted in May 2022, just as the RBA began its rate tightening cycle:
CoreLogic: Australian dwellings valued at $9.98 trillion in May 2022.
Thus, Australian dwelling values had shaved around $500 billion of value over the five months to October.
The reason why the ~$500 billion value loss (a 5% decline) is lower than the 6.0% dwelling value decline recorded nationally in October is because the number of dwellings in Australia continues to grow. Therefore, the fall in house prices has been partly offset by an increase in the number of homes.
Assuming Australian dwelling values end up declining 15% peak-to-trough, this suggests that at least $1.2 trillion in value will end up being wiped from Australia’s housing stock this cycle.
