Australian home value declines hit record lows
Australian homeowners brace as we may not have reached the bottom of the cycle yet
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Australian home values have hit a record low, data from CoreLogic has just revealed.
The CoreLogic Daily Home Value Index showed a -8.4 percent decline on January 7 after a high on May 7 2022, exceeding the previous record of peak-to-trough declines of -8.38 percent between October 2017 and June 2019.
Australian homeowners may be in for further declines, with more falls expected.
CoreLogic says last year’s consecutive rate rises following on from a 300 basis point increase in the cash rate are responsible for the sharp fall as borrowers struggle to finance home purchases.
The Reserve Bank of Australia has increased the cash rate in an attempt to draw down inflation in 2023.
Increasing strain on households, CoreLogic notes that right now Australians are carrying more debt than through historic periods of rate rises. In addition, post lockdown spending and higher inflationary pressures may have resulted in less household savings which could be used as a home deposit.
The three largest capitals have experienced the greatest falls, with Sydney seeing a peak-to-trough decline of -13 percent, followed by Brisbane on -10 percent and Melbourne at -8.6 percent. To put the falls in perspective, the significant drops follow an unprecedented national home value rise of 28.9 percent between September 2020 and May 2022. At the end of last year, CoreLogic data shows that home values were still 16 percent higher than they were five years ago.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
Scheduled auctions fall to winter levels as vendors hold back on going to market
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Grand final fever and the long weekend have dampened scheduled auction activity this weekend, CoreLogic reports.
The number of homes scheduled for auction this weekend is set to halve, with 1,324 properties listed, marking the quietest week since mid June. Melbourne will experience the quietest week since Easter, CoreLogic data shows, with 223 homes prepared to go under the hammer. In Sydney, 805 properties are expected to go to market, the lowest number in seven weeks.
With long weekends in Queensland and South Australia, numbers are also down in Brisbane (111) and Adelaide (86), less than half the properties available for auction the previous week. It’s a less dramatic drop in Canberra, where 83 homes are scheduled for auction, down -22.4 percent on the previous week.
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Americans now think they need at least $1.25 million for retirement, a 20% increase from a year ago, according to a survey by Northwestern Mutual
