Everyone agrees: Every month it’s getting cheaper to buy a house, and every month it’s getting more expensive to pay it off.

That’s life, right there in all it’s oxymoronic glory.

National home prices have now seen 9 straight months of price declines, with the average place now about 4.25% below the peak early last year, according to the latest PropTrack Home Price Index.

The new report has national home prices down another 0.21% in December, with all capitals but for Darwin and Hobart recording a decline.

Adelaide recorded its first post-pandemic price dip in December, slipping 0.18% in the final month of the year.

Key Proptrack takeaways:

  • Nationally, home prices declined by 0.21% over December, placing values 2.29% lower compared to 12 months ago.
  • Despite recent falls, prices nationally are still 29% above their pre-pandemic levels.
  • The largest monthly declines were seen in Canberra (-0.43%) and Melbourne (-0.34%). For Adelaide (-0.18%), this was the first monthly price drop seen post-pandemic.
  • In capital cities, prices are down 3.99% compared to their level a year ago, while regionally they are up 2.08%.

 

Over at CoreLogic, the numbers are even more telling.

The property data firm’s national Aussie Home Value Index fell -1.1% in December, taking house values -5.3% lower over the 2022 calendar year.

After the monthly rate of falls moderated between a bit in September and November, housing markets finished the year on a fizzle.

“The re-acceleration in the downwards trend was mostly driven by a worsening in the monthly rate of decline across Melbourne (which lifted 40 basis points between November’s -0.8%, and December’s -1.2% fall), but declines also accelerated across Sydney, Adelaide, Darwin and Canberra month-on-month, according to CoreLogic.

On the flip side, the pace of falls eased across Brisbane and Hobart, while value movements in Perth remained slightly positive for the second consecutive month.

That’s a first

The -5.3% drop in housing values through 2022 marks the first time since 2018 where national home values fell over the calendar year.

The 12 months to December also mark the largest calendar year decline since 2008, when values were down -6.4% amid the Global Financial Crisis, and successive interest rate rises.

CoreLogic 2022 annual home value falls:

  • Sydney (-12.1%)
  • Melbourne (-8.1%)
  • Hobart (-6.9%)
  • ACT (-3.3%)
  • Brisbane (-1.1%)

3 capitals saw values rise over the year:

  • Adelaide (10.1%)
  • Darwin (4.3%)
  • Perth (3.6%)

CoreLogic’s research director, Tim Lawless, says it’s been a year of contrasts.

Housing values mostly rising through the first 4 months, but then crashing as the RBA began its mad (and fastest ever) rate tightening cycle.

“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen -8.2%, following a dramatic 28.9% rise in values through the upswing.”

The upper quartile of the housing market led the downturn through 2022, with most capital city and broad ‘rest-of-state’ regions recording weaker performance across the upper quartile relative to the lower quartile and broad middle of the market.

“The more expensive end of the market tends to lead the cycles, both through the upswing and the downturn. Importantly, recent months have seen some cities recording less of a performance gap between the broad value-based cohorts. Sydney is a good example, where upper quartile house values actually fell at a slower pace than values across the lower quartile and broad middle of the market through the final quarter of the year,” Mr Lawless said.

Although housing values across the combined regional areas of Australia were roughly unchanged over the year (+0.1%), results were more mixed across the states. Annual falls across Regional NSW (-2.7%) and Regional Victoria (-1.3%) offset annual gains across the remaining regional markets.

“Regional SA has been the stand out for growth conditions over the past year, with values up 17.1% through 2022,” Mr Lawless said. “The well-known Barossa wine region led the capital gains with a 23.0% rise in values over the calendar year.”

Despite the downturn across many areas of the country, housing values generally remain well above pre-COVID levels. Across the combined capital cities, dwelling values remained 11.7% above where they were at the onset of COVID (March 2020), while values across the combined regional markets are still up 32.2%.

“Melbourne is the only capital city where the current downwards trend is getting close to wiping out the entirety of COVID gains, with dwelling values only 1.5% above March 2020 levels,” Mr Lawless said.

“The relatively small difference between March 2020 and December 2022 levels can be attributed to a number of factors, including a larger drop in values during the early phase of COVID, a milder upswing through the growth cycle and the -8.3% drop since values peaked in February.”

At the other end of the scale is Adelaide, where housing values remain 42.8% above pre-COVID levels. Adelaide dwelling values recorded a 44.7% gain through the upswing, and have held relatively firm since interest rates started to rise, down only -1.3% from the recent peak.