Anybody hoping for Australian house prices to stabilise in early 2023 will be disheartened by the latest data from CoreLogic’s daily dwelling values index.
After two consecutive weeks of moderating home price falls over the holiday period, value losses across the five major capital city markets accelerated in the week ended 12 January to -0.27%:
This chalked up the 36th consecutive weekly house price decline, which began immediately after the Reserve Bank of Australia’s (RBA) first interest rate hike in early May 2022.
This week’s decline was again driven by the three largest capital cities of Sydney (-0.35%), Melbourne (-0.22%) and Brisbane (-0.35%):
On a quarterly basis, home values continue to fall at a rapid pace, down 3.3% at the 5-city aggregate level. Brisbane (-4.8%) continues to lead the way, followed by Sydney (-4.0%) and Melbourne (-2.8%), whereas Adelaide (-1.0%) and Perth (-0.1%) continue to buck the trend:
Home values have now fallen 9.2% from their peak at the 5-city aggregate level, led by Sydney (-13.2%), Brisbane (-9.9%) and Melbourne (-8.7%):
My expectation is that 5-city aggregate dwelling values will fall on average by 1% per month all the way to the third quarter of this year.
Then the RBA will cut rates and prices will start to rise before the end of the year.
The downside risk is that the fixed rate mortgage reset will cause a wave of forced sales that will drive house prices down even further. So that is something that should be watched closely to see how it unfolds.
Either way, the national housing market has already recorded its biggest fall on record. And in a matter of months, several key markets like Sydney, Melbourne and Brisbane will also record their biggest ever losses.