The CoreLogic daily dwelling values index, which measures home values across Australia’s five largest capital cities, has now fallen 10% from its May peak.
This follows the Reserve Bank of Australia’s (RBA) ultra-aggressive monetary tightening, which has now seen interest rates rise by 3.25% from their April 2022 pre-tightening level:
Data including the smaller capital cities and regions is only updated monthly. This shows that home values nationally were down 8.9% from peak at the end of January, with the combined capital cities down 9.6% and the combined regions 7.4% lower:
CoreLogic has released its February Housing Chart Pack. This shows that the total value of Australian residential real estate was $9.2 trillion dollars at the end of January, based off 10.9 million dwellings:
This is a sharp decline from the all-time high $10 trillion residential real estate valuation recorded in May 2022, which is when the RBA commenced its rate tightening cycle:
Therefore, roughly $800 billion has been wiped from the value of Australia’s housing stock in only eight months.
The reason why the $800 billion value loss (an 8% decline) is lower than the 8.9% total dwelling value loss shown above is because the number of homes in Australia has grown by 100,000 over this period.
Thus, the decline in home values has been partially offset by an increase in the number of dwellings.
Most commentators are predicting a 15% to 20% peak-to-trough decline in Australian dwelling values.
If this comes to fruition, roughly $1.4 trillion to $1.8 trillion will end up being wiped off Australia’s housing stock this cycle.
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