Australian Property Prices Drop, With Sydney Dropping the Most

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Rising interest rates and higher living costs experienced by the country are driving property prices to decline continuously. The recent drop in housing prices is the most significant in forty years.

The analysis reported in CoreLogic’s Pain & Gain Report identified 102,000 property resales and discovered that these were sold for 1.4% less than average prices nationally in August, with Sydney prices at the forefront, diving 6.1% in the last three months.

In September alone, Sydney values fell by 1.8%. Melbourne, Brisbane and Hobart fell by 1.1%, 1.7% and 1.4%, respectively. Other cities like Adelaide and Perth saw softer declines, with 0.2% and 0.4%, respectively.

“Multiple interest rate hikes have led to a weakening in the home values in Sydney and Melbourne; however, residential resale results in some cities remain strong with significant gains across almost all resales,” says Eliza Owens, Head of Research for CoreLogic.

“The loss of momentum in the pace of value decline was evident across most of the capital cities and broad rest-of-state regions, with a few exceptions,” stated Tim Lawless, research director for CoreLogic.

CoreLogic notes that Darwin was an exception, its housing values did not trend downward, but it’s too early to say. Prices in regional Australia have also shown consistent declines, with standalone homes seeing more significant dips than apartments and units.

The decline in property prices could have been an initial reaction to the rapid rise of interest rates, says Lawless. Prices will continue to decrease if the interest rates continue to rise. Many property sellers stopped listing properties due to the volatile market.

On top of this, the Australian Bureau of Statistics reports that there has been a significantly lower number of home loans since June. However, rent prices are continuously increasing as fewer rental properties are in the country. This allows landlords to raise rental prices constantly. In September alone, rent prices have risen by 0.6%.

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