‘Double-dip’ house price correction will please RBA


CoreLogic’s daily dwelling values index is showing that a two-speed market has developed across Australia’s major capital cities.

As illustrated in the next chart, value growth has stalled across Melbourne and Sydney, which has dragged down growth at the 5-city aggregate level.

By contrast, growth remains strong across Brisbane, Adelaide and Perth:

CoreLogic 28-day change

Quarterly value growth is also far lower across Melbourne and Sydney than the other three major capital city markets, which are powering on:

Quarterly house price change

The stalling of value growth across Sydney and Melbourne is matched by their respective auction markets.


Monthly average auction clearance rates across both Sydney and Melbourne have fallen sharply from their peaks in May 2023.

Sydney’s auction clearance rate fell from 73% in May to 64% in November, whereas Melbourne’s clearance rate fell from 70% in May to 59% in November:

Auction clearance rates

Listings have also ballooned across Sydney and Melbourne, which helps to explain their falling price growth versus the other major capitals, where total listings have shrunk:

For sale listings

Source: CoreLogic

The stalling of Sydney’s and Melbourne’s markets have led some analysts to predict a possible ‘double-dip’ price correction next year.


Earlier this month, CoreLogic’s research director, Tim Lawless, said that “that fragility in buyers’ demand has been exposed by the latest rate hike” and warned that Sydney and Melbourne could move “into a mild double-dip downturn in December and coming into early January”.

AMP chief economist, Shane Oliver, commented that “Sydney and Melbourne house prices are decelerating faster than expected” and warned that “the supply shortfall-driven rebound in home prices this year is rapidly coming to an end as high rates get the upper hand again”.

Whereas economist Stephen Koukoulas commented that last month’s 0.25% rate hike from the RBA “could be the straw that breaks the camel’s back” and predicted “between 3% and 5% drop in Sydney and Melbourne house prices”.


Given the RBA stated in October that it was concerned about the “stronger than expected recovery” in Australian house prices, it would be satisfied by the loss of price momentum and reduces the likelihood of another rate rise in February.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.