House, unit prices tumble in 80% of Australian suburbs

That's almost double the number recorded in the second quarter

House, unit prices tumble in 80% of Australian suburbs

Prices have dropped for houses and units in nearly 80% of Australian suburbs over the past three months, affecting 2,404 markets.

That’s almost double the number recorded in the previous quarter, according to a report by The Australian Financial Review.

According to new data from CoreLogic, all analysed suburbs across Sydney, Melbourne, Canberra and Hobart posted a drop in values over the third quarter, with Hobart the only city to also post a quarterly fall in all unit markets.

Darwin, Perth and Adelaide had the lowest share of suburbs where house and unit values fell during the quarter. However, those cities also peaked later in the cycle than the larger capitals, according to AFR.

Eliza Owen, head of research at CoreLogic, said price drops were likely to become even more widespread in the December quarter as repeated interest rate hikes continue to be passed on to borrowers.

“Price falls may begin to extend to the outer suburbs of Perth and Adelaide, where prices have so far been relatively resilient; however, I think we’re unlikely to see absolutely every suburb recording year-on-year declines all at once,” Owen told AFR. “The lagged nature of some housing markets means that we could start to see a recovery in prices across some parts of the country, just as other suburban markets start to see accelerating declines. There are also a few key tailwinds at play which could revive conditions earlier than expected. These include low listings levels and strong overseas migration across Sydney and Melbourne, where high growth in unit rents could lead to more positive price trends as early as next year.”

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House prices dropped across all 563 Sydney suburbs in the last quarter, led by Asquith with a 13% drop, followed by Redfern (11.8%), Killarney Heights (11.1%) and Artarmon (11%). Tumbling prices also pulled 34 Sydney suburbs out of the million-dollar club, AFR reported.

House prices also fell in all 385 analysed Melbourne suburbs, with more than 25% of them recording a decline greater than 5%. House prices fell in 94.3% of Brisbane suburbs, more than half of Perth’s suburbs and 48% of Adelaide suburbs.

Houses and units are worth less now than they were a year ago in nearly 40% of suburbs nationwide, AFR reported. In Sydney and Melbourne, house values have dropped below their 2021 levels in nearly three-quarters of all suburbs. Adelaide, however, bucked the trend, with all markets staying in positive territory year over year.

Owen said that if historical patterns can be trusted, the more affordable markets were likely to be less impacted compared to the broader market.

“I think we could see the decline becoming a little more widespread, but still fairly shallow, across the affordable capital city markets that have so far been resilient, while there are early signs of a slowdown in the decline of more expensive and central parts of the capital city dwelling markets,” she told AFR.