How Have Australian Properties Changed In Value Since Their Peak?

Australia's national dwelling values have fallen by -7.4% from their October 2017 peak through to the end of March 2019. While this figure is often quoted, it is also important to understand the context in terms of how much that actually is in dollar terms. Based the median dwelling value at the time of the market peak, a -7.4% fall in national dwelling values translates approximately into a $40,590 decline in dwelling values.

The information collected for this blog is by CoreLogic.

Looking at falls across the combined capital cities, the decline has been larger than national falls with values -9.2% lower than their September 2017 peak. This translates to an approximate $59,478 reduction in dwelling values. Throughout the combined regional markets, values have fallen by -2.5% or $9,464 from their May 2018 peak.

Looking at falls across the combined capital cities, the decline has been larger than national falls with values -9.2% lower than their September 2017 peak. This translates to an approximate $59,478 reduction in dwelling values. Throughout the combined regional markets, values have fallen by -2.5% or $9,464 from their May 2018 peak.

Let us take a look across the states.

QLD
Brisbane dwelling values are $7,796 or -1.6% lower than they were at their peak. In regional Qld, values are -4.9% lower than their peak of -$18,773 lower.
NSW
Sydney values are -13.9% lower than their peak or down $124,739. In regional NSW, values have declined by -4.1% or -$18,674.
VIC
Melbourne dwelling values have fallen by -10.3% or $71,404 from their peak. Regional Vic values are $2,749 lower than their peak having fallen by -0.8%.
SA
Adelaide dwelling values are -0.5% or -$2,307 lower than their peak. Regional SA values are -3.4% or -$8,623 lower than their peak.

WA
Perth dwelling values peaked in mid-2014 and are currently -18.1% or -$97,797 lower. Regional WA values have fallen -31.6% from their peak taking them $118,734 lower.

TAS
Hobart and regional Tas are the only two major regions of the country in which values are yet to have fallen from their peak.

NT
Darwin dwelling values are -27.5% or -$145,980 lower than their peak. In regional NT the falls have been much more moderate at -7.9% or -$31,761

Canberra
Values are -0.2% lower than their peak or -$1,071.

While a percentage fall in values gives you an idea of how the market is fairing, seeing the actual value of the declines is a stark reminder of the actual losses. While the recent declines in markets like Sydney and Melbourne can be put in context of the significant increases over recent years, this is little comfort for home owners that purchased at or near the peak of the market.

Over the coming months, declines are expected to continue, leading to further falls in asset values. Importantly, while values are falling, the debt held against these properties is unlikely to be reducing at the same pace resulting in wealth declines for holders of residential property.

From another perspective, lower housing values are becoming more attractive to first home buyers and prospective buyers who were previously priced out of the housing market. With advertised stock levels remaining high and mortgage rates tracking around the lowest level since the 1960’s (and potentially moving even lower later this year), active buyers are back in the drivers seat to take advantage of improved housing affordability and the low cost of debt.