Shannon Molloy| Real Estate| 1 August 2022
Home prices have just fallen further – except in these two capital cities (realestate.com.au)
Property price falls extended further across Australia in the past month, but there are two capital cities defying the cooling market trend, new data reveals.
The latest PropTrack Home Price Index for July was released today and shows that sharp interest rate hikes continue to impact the real estate sector, weighing on buyer sentiment.
Paul Ryan, the report’s author and a senior economist at PropTrack, said this is especially the case in Sydney and Melbourne, where prices fell last month by 0.64% and 0.63% respectively, and are now down more than 3% from their peaks in early 2022.
At a national level, home prices fell 0.4% in the month of July and are now 1.66% below their peak in March, Mr Ryan added.
Home prices have fallen by 1.66% nationally since March – a modest figure when considering the enormous growth seen in the past few years. Picture: Getty
Although, he pointed out that those declines are coming off historic highs, with home prices across the country having surged by more than 30% during the COVID-19 pandemic.
Uncertainty sparked by the Reserve Bank’s aggressive efforts to rein in rising inflation has seen buyers retreat in many parts of the country.
But there are two areas where momentum remains strong.
“South Australia and Western Australia experienced price increases in July,” Mr Ryan said. “Prices in Adelaide and Perth rose modestly, and these were the only capitals to see upward movements.”
In the South Australian capital, home prices rose 0.04% to $634,000 in the month and are now 21.23% higher year-on-year.
In the WA capital, home prices are 0.04% higher after July, now $534,000, up 8.78% in the past 12 months.
A two-speed market means some cities are performing better than others. Picture: Getty
On an annual basis, Adelaide and Brisbane have had the strongest markets in the country, both up by 21%.
Queensland’s capital saw another small fall in July for the second consecutive month, but Mr Ryan said prices are only down one-fifth of a percent from their peak.
“And they’re almost 50% higher than in March 2020,” he added. “The outperformance we’ve seen compared to other capital cities looks likely to continue.”
Australia’s most expensive markets – Sydney and Melbourne – are leading the property price fall trend.
This is likely driven by the fact that larger mortgage sizes in these areas have made rapidly rising interest rates more of an issue.
“Uncertainty about how much higher they will rise is likely biting these markets the most,” Mr Ryan said.