In brief
- National home prices fell 0.7 per cent last month, the biggest monthly drop since December 2022.
- Sydney and Melbourne led the falls, while top-end homes lost 3.2 per cent over three months.
Australia's housing market downturn is spreading across the country as higher interest rates and changes to property taxes take hold.
Figures from property analytics company Cotality showed national home prices fell 0.7 per cent last month, the largest single-month decline since December 2022.
Annual growth has slowed to 5.3 per cent, well below the double-digit pace recorded earlier this year.
The country's largest property markets, Sydney and Melbourne, recorded declines of 1.4 per cent and 1.2 per cent respectively. Both cities are more than five per cent lower than recent peaks.
Brisbane and Adelaide, where prices have recently boomed, also recorded drops of 0.6 and 0.2 per cent respectively.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
In Perth, which has recorded the strongest year-on-year growth of any capital city at 21.8 per cent, prices were virtually flat, rising just 0.1 per cent.
"For buyers who remain in the market, lower competition and elevated stock levels (when compared with the start of the year) mean greater choice and more negotiating power," the property analytics firm said.
However, the fall in prices has been led by properties at the higher end of the market, providing little benefit to first home-buyers who are also grappling with lower borrowing capacity after three interest rate hikes this year.
Homes in the top quarter of the market lost 3.2 per cent of their value in the three months to July, compared to a 0.3 per cent gain in the lower-price tier.
Beyond the capital cities, the regional property market recorded a drop a 0.2 per cent — the first decline since January 2023.
"There remains a mismatch between the pricing expectations of buyers and sellers," Cotality head of research Gerard Burg said.
Consumer sentiment has also been soured by high living costs, uncertainty caused by the ongoing Middle East war and tax changes announced in the May budget.
"We have observed a deterioration in the flow of new listings across the country in recent weeks, led by Sydney, as potential vendors assess a weak market and choose to wait until conditions improve," Burg said.
Rental prices have continued to rise due to low vacancy rates. Burg said national median rents had risen by more than $200 a week in the last five years.
"Despite the tight market conditions, there are question marks about how much further rents can rise," he said.
— With additional reporting by Australian Associated Press
For the latest from SBS News, download our app and subscribe to our newsletter.
