4 in 5 Aussie markets declined in Q4 2022
The number of Australian markets that reported a decline during the December quarter grew from less than 10 per cent in 2021 to 80.7 per cent last year, according to CoreLogic’s latest Mapping the Market report.
This trend was part of a larger market downturn, which resulted in 51.7 per cent of markets analysed by the research firm recording an annual value decline last year. Conversely, just under half (48.3 per cent) ended the year on the back of positive growth.
CoreLogic’s findings found that, on the back of consecutive rate hikes, high inflation, and weak consumer sentiment, Australia’s market downturn became more widespread.
CoreLogic economist Kaytlin Ezzy confirmed that “the market downswing doesn’t discriminate, with only a small proportion of suburban areas riding a wave of positive growth among the sea of declining values”.
One consequence of the downswing was the reduction in the number of million-dollar markets across the country, especially in Sydney, as Ms Ezzy revealed, “the most resilient suburbs found in more affordable areas and within the unit sector”.
Having recorded 439 million-dollar markets in March, the NSW capital ended the year with just 345 seven-figure suburbs.
Additionally, she explained: “The downswing has meant buyers who were previously priced out of some markets might start to see opportunities appearing, particularly in cities where larger downturns have been recorded such as Sydney, Melbourne, Brisbane, Hobart and Canberra.”
She noted rising interest rates, which have pushed serviceability buffers and increased mortgage repayments, have offset many of the benefits presented by declining values.
In Sydney, seven housing markets recorded an annual increase in value, slightly more than Melbourne’s six — although the Victorian capital’s results reflect a marginally larger proportion of its housing markets (1.6 per cent as opposed to 1.3 per cent for Sydney).
Similarly, Brisbane and Adelaide were dominated by declining markets. In the Queensland capital, 50 per cent of the analysed markets recorded yearly value declines, though this rate accelerated in the final quarter of the year when 94.4 per cent of suburbs registered a decrease. While in Adelaide, quarterly rates of decline grew from 0.3 per cent in the three months to September to 1.4 per cent for the same period preceding December.
Last year resulted in almost all national unit markets reporting annual rates of decline. Sydney led the pack with declines of 9.2 per cent, followed by Hobart (5 per cent) and Melbourne (5 per cent), while Brisbane (1.8 per cent), Canberra (2 per cent), and Perth (1.2 per cent) recorded declines throughout the December quarter.
Darwin was the only unit market to record a quarterly value rise, albeit a slight increase of 0.2 per cent.
Home values in Perth bucked national trends, rising 0.1 per cent in the December quarter as part of a 3.9 per cent annual gain leading to annual median home values of $586,721 — the most affordable capital city market for detached homes.
The national capital, Canberra, saw 100 per cent of the suburbs analysed by CoreLogic report a decline in home values for the three months to December, while the portion of housing markets that recorded an annual rate of decline soared from 27.1 per cent in September to 86.7 per cent in the year’s final month.
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