According to Cotality’s daily dwelling values index, home values have declined by 3.2% from their peak across the five major capital cities.
So far, this decline has been driven by Sydney (-5.8%) and Melbourne (-5.6%), with smaller falls of 1% or less recorded across the mid-sized capitals.
The build-up of for-sale listings across the mid-sized capitals points to stronger price falls in the period ahead.
As illustrated below by Cotality, listings have swelled by 35.9% in Brisbane, 31.5% in Perth, and 25.3% in Adelaide over the past 12 months, well above the combined capital city rise of 21.4%.
Source: Cotality
Separate data from Domain, published in the Australian Financial Review, shows a surge in for-sale listings in Western Australia and South Australia, with analysts tipping that prices will soon follow.
“When market conditions slow down, you find almost instantly that you start to see a build-up of supply and a build-up of stock”, Domain’s chief economist, Nicola Powell, said.
“The accumulation of listings is a forward indicator of what’s going to happen to price because listings start to build up, buyers realise there’s greater choice and that power of negotiation increases”.
“Sellers have to be much more mindful of the price that they’re asking and what they can achieve for that home. What happens to price is almost the lagging part of this dynamic”, she said.
SQM Research founder and managing director Louis Christopher noted that there has been a strong rise in both new and older listings, suggesting that more homes are coming onto the market and are taking longer to sell.
“July’s figures mark a significant shift in market conditions. National listing levels are now almost 23% higher than they were a year ago, giving buyers considerably more choice than they have had for some time”, Christopher said.
“What’s particularly noteworthy is that we’re seeing increases in both new listings and older listings. More properties are coming onto the market, but they’re also taking longer to sell”.
ANZ Bank this week forecast that dwelling values across the nation’s capital cities will fall by 10.6% from peak to trough, which would mark the steepest decline in at least 40 years.
What started in Sydney and Melbourne is forecast to spread to the other capital cities.
