Premium Suburbs Feel Price Pinch
Affordability constraints, credit crunches and a flood of listings are affecting growth.
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House prices have fallen across 7% of suburbs in the past three months.
This dip is a contrast to the March peak when just 1.4% posted a decline and according to analysts is the work of a surge in new listings, affordability constraints and tightening credit conditions.
Data from CoreLogic indicates mining towns and some regional markets that experienced the strong upswing earlier in the year have also posted the largest drops.
The volatility in these markets has seen prices slump by 10.3% in South Hedland in WA’s East Pilbara region during the past three months.
House prices fell by 4.7% in Millars Well and Pegs Creek in West Pilbara while units were weakest in West End in Townsville where values fell by 6.6%, East Fremantle in Perth a 4.2%.
However, it’s not an issue isolated to the regions with some of the country’s more premium suburbs feeling the punch.
The high end of the housing market – where dwelling values were about $1 million or more.
Since peaking at 3.5% monthly growth in March, the top 25% of the market by value has slowed to 1.5% through October.
By comparison, the middle market has slowed from 2.2% to 1.7% and the lowest segment 1.5% to 1.3% during the same period.
During the three months ending October house prices in the tony suburbs of Melbourne, including Armadale, Mont Albert and Blackburn posted declines of 0.5%, 0.4% and 0.1% respectively.
In Sydney, Waverley, in the city’s coveted eastern suburbs was the weakest premium market with house prices gaining just 0.7% over three months.
According to Eliza Owen, CoreLogic’s head of research, the slowdown is due to affordability constraints and a glut of listings.
“The volatility at the high end of the market, demonstrated by the rapid decline in growth rates, suggests this segment can also expect a larger downturn in property values.”
“The housing market is well and truly past its peak for the current cycle, and it makes sense that as more headwinds accumulate, price increases will continue to slow, and more suburbs may see an adjustment in price,” she said.
“This comes back to borrowing constraints associated with the increased loan serviceability buffer from APRA, as well as banks proactively tightening lending conditions,” Ms Owen added.
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The actress and her husband, comedy writer Dave McCary, spent more than three years restoring the house, which is one of the priciest properties for sale in the Texas city.
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In 2021, actress Emma Stone purchased a historic estate in Austin, Texas, with a plan to move her family there. Four years later, she has instead decided to put the property on the market.
The actress and her husband, comedy writer Dave McCary, are asking $26.5 million for the newly renovated estate, according to Eric Moreland of Moreland Properties/Forbes Global Properties, one of the listing agents. The 1.25-acre property, located in the upscale Tarrytown neighbourhood, will be among the most expensive on the market in Austin.
Stone and McCary have spent more than three years renovating and restoring the Texas property, Moreland said.
A spokesperson for Stone didn’t respond to requests for comment. Moreland said the couple’s New York business interests have expanded since they started the remodel, and while they hope to live in Austin eventually, it doesn’t make sense for now.
The couple, who are co-founders of the production company Fruit Tree, own a roughly $12 million apartment in lower Manhattan, according to property records. Stone is slated to star in the upcoming contemporary Western film “Eddington.”
It’s unclear what Stone and McCary paid for the Austin property, since Texas is a nondisclosure state . The Georgian-style brick house dates to around 1940, making it one of the oldest estates in the area.
The roughly 10,000-square-foot estate includes a main house with four bedrooms and a two-bedroom guesthouse. The property also has a pool, a hot tub, and a garage with a screening room and entertaining space above.
As part of the renovation, the couple removed, cleaned and reused all the exterior brick. They also reconfigured some of the living spaces, opening the kitchen to the living room for a more modern layout. It took more than a year just to install the millwork in the screening room, said Moreland.
The contractors are now putting the finishing touches on the property, he said.
The “La La Land” actress has a track record of buying and selling her homes for significantly more than she paid. In 2022, she sold her blufftop Malibu, Calif., home for $4.425 million after buying it for $3.25 million in 2018, according to property records.
Last year, she sold her home in L.A.’s Comstock Hills neighbourhood for $4.3 million, significantly more than the $2.3 million she paid in 2019.
Austin saw an influx of new residents during COVID, but many of those are now returning to the East and West coasts, particularly workers in the tech sector.
While the market “has come down to earth a little bit” since the pandemic-era boom, Moreland said, he has seen a number of $20 million-plus deals over the past few months.
Moreland has the listing with colleague Diane Humphreys.
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