50% OF AUSSIE MARKETS DECLINED IN 2022: CORELOGIC
The number of Australian markets that reported a decline during the December quarter grew from less than 10 per cent in 2021 to 80.7 per cent last year, according to CoreLogic’s latest Mapping the Market report.
This trend was part of a larger market downturn, which resulted in 51.7 per cent of markets analysed by the research firm recording an annual value decline last year. Conversely, just under half (48.3 per cent) ended the year on the back of positive growth.
CoreLogic’s findings found that, on the back of consecutive rate hikes, high inflation, and weak consumer sentiment, Australia’s market downturn became more widespread.
CoreLogic economist Kaytlin Ezzy confirmed that “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”.
One consequence of the downswing was the reduction in the number of million-dollar markets across the country, especially in Sydney, as Ms Ezzy revealed, “the most resilient suburbs found in more affordable areas and within the unit sector.”
Having recorded 439 million-dollar markets in March, the NSW capital ended the year with just 345 seven-figure suburbs.
Additionally, she explained: “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, Hobart and Canberra.”
She noted rising interest rates, which have pushed serviceability buffers and increased mortgage repayments, have offset many of the benefits presented by declining values.
In Sydney, seven housing markets recorded an annual increase in value, slightly more than Melbourne’s six — although the Victorian capital’s results reflect a marginally larger proportion of its housing markets (1.6 per cent as opposed to 1.3 per cent for Sydney).
Similarly, Brisbane and Adelaide were dominated by declining markets. In the Queensland capital, 50 per cent of the analysed markets recorded yearly value declines, though this rate accelerated in the final quarter of the year when 94.4 per cent of suburbs registered a decrease. While in Adelaide, quarterly rates of decline grew from 0.3 per cent in the three months to September to 1.4 per cent for the same period preceding December.
Last year resulted in almost all national unit markets reporting annual rates of decline. Sydney led the pack with declines of 9.2 per cent, followed by Hobart (5 per cent) and Melbourne (5 per cent), while Brisbane (1.8 per cent), Canberra (2 per cent), and Perth (1.2 per cent) recorded declines throughout the December quarter.
Darwin was the only unit market to record a quarterly value rise, albeit a slight increase of 0.2 per cent.
Home values in Perth bucked national trends, rising 0.1 per cent in the December quarter as part of a 3.9 per cent annual gain leading to annual median home values of $586,721 — the most affordable capital city market for detached homes.
The national capital, Canberra, saw 100 per cent of the suburbs analysed by CoreLogic report a decline in home values for the three months to December, while the portion of housing markets that recorded an annual rate of decline soared from 27.1 per cent in September to 86.7 per cent in the year’s final month.
GOVERNMENT LAUDS SA’S RESILIENCE AMID DOWNTURN
The South Australian government lauded the strength of its property market following the release of new data showing growth in dwelling approvals and solid annual property price growth in the state.
Data from the Australian Bureau of Statistics (ABS) showed that the total number of dwelling approvals in the state grew 10 per cent over the month of November 2022 to be 1,226 — the highest increase on the mainland.
Further testament to the festival state’s market vitality was its strong annual dwelling approval figures, which showed buildings greenlit by the government rose 15.2 per cent over the year to November 2022.
The figures propelled South Australia to stand out from the rest of the capital city pack, with all other mainland states experiencing significant decreases in dwelling approvals led by Western Australia (33.8 per cent), Queensland (25.5 per cent), and Victoria (17.4 per cent). Nationally, dwelling approvals are down by 15.1 per cent.
Following the building approval figures, the South Australian government also cited the recent data from CoreLogic for December — which indicated house prices remain steady in Adelaide — as further proof that the wine state is not easily succumbing to the market downturn.
Data from the property market research firm showed that dwelling values in Adelaide fell by 0.4 per cent during the last month of 2022 — a smaller contraction figure compared to larger monthly declines recorded in other cities such as Sydney (-1.4 per cent), Canberra (1.2 per cent) and Darwin (0.5 per cent).
Additionally, the state’s capital recorded the highest median house price increase of all Australian capital cities over the year at 10.1 per cent, which lifted median property prices to $649,041.
State Treasurer Stephen Mullighan stated: “These latest figures show South Australia’s housing market remains strong, especially compared to the eastern states, with housing prices remaining at current high levels and demand for new housing up.”
He also noted that the state’s housing market had not experienced the volatility observed in the eastern states, adding that it’s “good news for property owners”.
“While the strength of the property market is positive for those already owning houses, we know we need more supply to help others get into home ownership,” he explained.
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Regards David, Benjamin & the Team at DB Philpott Real Estate