Right on cue, Brisbane leads house price plunge but the worst might soon be over
Brisbane house prices recorded the biggest falls in the nation last month, dropping 2 per cent while regional Queensland was down 1.3 per cent.
Labor housing spokesperson Jason Clare said the coalition's policy would drive up prices and hurt young Australians. (Photo: Domain)
CoreLogic national home value index dropped another 1.2 per cent, marking six months of declines, which have occurred, in part, because of interest rate rises.
The Reserve Bank board will meet again today and economists expect it will increase its cash rate again, this time by 25 basis points (0.25 per cent), but potentially as high as 50 basis points.
CoreLogic’s Tim Lawless said the falls in Brisbane were gathering momentum while it appeared to be easing in Sydney and the other capitals. However, there is important context that includes the significant increases in house prices last year.
On a 12-month basis, Brisbane house prices are still up by 8.5 per cent and would be up considerably more over an 18-month period which would include most of the boom in prices. Capital city house prices jumped by 30 per cent during the upswing phase.
Sydney and Melbourne have had far more brutal swings and on a 12-month basis Sydney prices are down 8.5 per cent and Melbourne was down 5.6 per cent.
Housing values were still above pre-Covid levels. The median house price in Brisbane is $728,000 and regionally it’s $556,000.
Lawless said it was too early to say the worst of the declines phase was over and there was a chance the falls could accelerate as interest rates climb and household balance sheets become stretched.
“To date, the housing downturn has remained orderly at least in the context of the significant upswing in values,” Lawless said.
“This is supported by the below average flow of new listings that is keeping overall inventory levels contained.”
Unit values have not fallen as sharply as house values and were down 0.7 per cent in October.
PropTrack senior economist Eleanor Creagh agreed that further rate rises would continue to put downward pressure on house prices but said there was evidence the downturn was starting to ease.
“The RBA appears done with frontloading the tightening cycle, slowing the pace of its hikes,” Creagh said.
“This may give prospective buyers a confidence boost. Evidence buyers were taking advantage of the less competitive conditions.”
She also said the tight rental market, low unemployment and housing supply pressures would also put upward pressure on home prices.