Australia’s Housing Downturn Spreads
Australia’s housing market lost further momentum in July, with Cotality’s national Home Value Index falling 0.7%, its largest monthly decline in more than three years.
Sydney and Melbourne remained the weakest major markets, with home values falling 1.4% and 1.2% respectively during the month.
However, the slowdown is becoming more widespread. Brisbane declined 0.6%, while Adelaide fell 0.2%, with both cities recording two consecutive months of falling values following historical revisions.
Perth showed a small 0.1% monthly increase, although its June result was revised to a 0.5% decline, signalling how quickly conditions have shifted from the city’s earlier growth phase.
Premium Homes Feel More Pressure
The correction has been particularly noticeable at the higher end of the market.
Values in the upper quartile fell 3.2% over the three months to July, compared with a 0.3% gain among lower-value properties.
Several factors are weighing on demand, including affordability constraints, three cash-rate increases and weak consumer confidence. At the same time, advertised housing supply has increased.
Capital-city auction clearance rates have remained below 50%, suggesting buyers and sellers are still struggling to agree on pricing.
Outlook
Australia’s housing market is likely to remain price-sensitive and uneven across cities and property segments in the near term.
With higher-value homes experiencing the greatest pressure, buyers may gain greater negotiating power in selected markets. For homeowners and investors, conditions will require closer attention to local demand, pricing and affordability rather than relying on broader national trends.
The contents of this article were contributed by Lily Chong, Head of IQI Australia.
