Down, Down, Prices All Around: A Look at the Australian Housing Market in 2022

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In 2022, the national property downturn resonated in more than half of Australia’s house and unit suburbs as consecutive rate hikes, high inflation, and declining consumer sentiment all took their toll.

Economist Kaytlin Ezzy noted that mapping suburb-level data illuminated the severity of the decline in house prices and emphasized how greatly housing markets could differ between capital cities concerning houses or units.

She highlighted how the Australian housing market had gone from boom to bust, with less than 10% of houses and units recording a decline in value during the December quarter of 2021.

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,” Kaytlin said.

This has resulted in a reduction in the number of million-dollar suburbs, particularly in our most expensive housing market, Sydney, with the most resilient suburbs found in more affordable areas and within the unit sector,” she added.

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, and Canberra. Much of the benefits of falling values have likely been offset, with rising interest rates pushing serviceability buffers and mortgage repayments higher,” Kaytlin explained.

In Sydney, seven out of 547 house suburbs experienced a surge in their values in 2022, mainly located on its southeastern side. Since March last year, the continuous downturn has reduced from 439 to 345 million-dollar house suburbs.

During the December quarter, Melbourne had six of its 371 house suburbs (1.6%) experience an increase in value while all but eight (2.2%) witnessed a decline in their annual home value. The range of changes was broad; Darley saw a 1.6% rise, compared to Highett’s 18% fall near the Inner South region.

In the Brisbane area, an overwhelming 94.4% of suburbs analyzed saw a decrease in home values quarter-over-quarter, with 302 out of 320 shrinking and 50% recording yearly deterioration from two neighbourhoods in September to 160 by December.

In Canberra city, each of the 83 suburbs evaluated saw a dip in housing prices during the December quarter. This continuing downturn has resulted in 86.7% or more homes experiencing yearly drops since September, compared to only 27.1%.

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