Australian home values dropped 1.2 per cent in October, the seventh straight monthly fall, according to property research group Cotality. The national index now sits 6.7 per cent below its March peak, a loss of about $63,400 on the median dwelling, which is now valued at $884,855.
Across the capital cities, values are down 8.1 per cent in seven months. That is just shy of the 8.2 per cent fall recorded in the 2017 to 2019 downturn, and Cotality’s Gerard Burg says the current slide will easily pass it. He calls it a demand-led downturn, with higher interest rates cutting borrowing power and lifting repayments.
Sales are weak. Over the past three months they were 23 per cent lower than a year earlier, auction clearance rates are consistently under 50 per cent, homes are taking a median 39 days to sell, and vendor discounting has hit 4.7 per cent. Investor demand has also cooled after the federal budget’s changes to property tax breaks.
Both Cotality and Domain’s chief economist Nicola Powell expect buyers to stay cautious until the Reserve Bank signals rates are heading down, which they don’t see before the second half of 2027. Powell says a 10 per cent peak-to-trough drop is quite possible. Some agents see opportunities for first home buyers and upsizers, as pricier homes have fallen furthest.
What it means for your money
If you’re buying, weak demand gives you more room to negotiate, but make sure your budget can handle further rate rises. If you’re selling, expect longer sale times and bigger discounts, and avoid relying on a quick sale to fund your next purchase.
Source: ABC Business