Australian Property Market Sees Mixed Signals as Suburbs Face Declining Values

In a recent CoreLogic report, nearly a third of Australian suburbs have experienced a drop in property values in the three months leading up to August, indicating a growing disparity within the national housing market. The September 2024 Housing Chart Pack revealed a distinct downturn in several areas, particularly in Victoria, where Melbourne and its regional suburbs saw the most significant declines.

“Victoria is clearly leading the downturn, with a significant proportion of its suburbs experiencing falling values,” said CoreLogic economist Kaytlin Ezzy. She noted that while the national average still shows a rising trend, the pace has slowed considerably, revealing underlying market weaknesses.

In contrast, Western Australia has emerged as a beacon of growth amidst the broader slowdown. Perth, in particular, showcased a “remarkable turnaround,” with all surveyed suburbs in the city reporting value increases, ranging from modest to significant gains across the region. “In the three months to August 2024, there was not a single suburb analysed where prices had fallen,” Ezzy highlighted, underscoring Perth’s robust performance compared to other major cities.

The report also pointed out broader national trends, with 29.2% of suburbs nationwide witnessing declines, a stark increase from the previous year’s 17.2%. This shift was particularly pronounced in Sydney, where the proportion of suburbs with falling values rose dramatically from 3.8% to 25.9%.

As the spring selling season approaches, Ezzy anticipates further challenges, especially in markets like Adelaide and Brisbane. “It’s likely this easing will continue into the seasonally busier spring selling period, with additional listings putting further downward pressure on values,” she predicted.

Despite the cooling in some regions, the total value of residential real estate in Australia grew to a staggering $10.95 trillion, supported by a 9.3% increase in sales volume year-over-year. Investor lending also saw a robust increase, climbing 5.4% in July and marking a significant year-on-year rise of 26.5%.

This complex landscape offers both challenges and opportunities, with certain areas like Perth bucking the national trend, while others like Melbourne and Sydney brace for potential declines. The coming months will be crucial in determining whether these trends will deepen or stabilize as market dynamics continue to evolve.

References:

https://www.brokernews.com.au/news/breaking-news/more-than-a-quarter-of-australian-suburbs-see-value-drop-285600.aspx