CoreLogic’s dwelling value results for October revealed that values nationally have fallen 6.0% from their recent peak, with the combined capital cities down 6.5% and the combined regions down 4.9%:
In order to gauge how this downturn compares with history, I have plotted the current decline from peak at the 5-city aggregate level against prior corrections based on CoreLogic’s hedonic index dating back to 1980.
The 5-city aggregate index measures the weighted average change in dwelling values across Sydney, Melbourne, Brisbane, Perth and Adelaide, and captures more than two-thirds of the nation’s dwellings by value.
As shown below, the current decline of 6.6% in only six months is easily the fastest rate of decline on record at the 5-city level. However, values would still need to decline by another 4.1% to match the record peak-to-trough decline of 10.7% recorded between 2017 and 2019:
Fastest decline on record.
Given the RBA yesterday lifted the official cash rate by another 0.25%, with more rate rises to come, the 2017-19 record price correction will easily be surpassed.
The only ‘good’ news coming from CoreLogic’s results is that the quarterly rate of decline has moderated to 4.1% from 4.5% at the beginning of the month:
Home values Bleed-out more slowly.
Therefore, Australian home values are hemorrhaging more slowly.
