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ResidentialPhil BartschTue 19 Jul 22

Blue-Ribbon Suburbs on Frontline as Market Slides

The downturn in Australia’s housing market is spreading at speed, hitting the country’s most expensive suburbs first, as pressure mounts from interest rate hikes and rising inflation.

Declining values were recorded in 41.9 per cent of house and unit markets in the three months to June, almost double the 23.6 per cent of the first quarter.

The sudden surge of momentum in the property downtown is indicated in the latest update to Corelogic’s interactive Mapping the Market tool, which analyses changes to median values in 3085 capital city markets.

Its data showed housing values dipped 0.2 per cent nationally during the June quarter, with every capital city and broad rest-of-state region “well past their peak rate of growth”.

Corelogic economist Kaytlin Ezzy said the “significant uptick” in the proportion of declining markets was not surprising given the analysis captured two of the three recent rate hikes.

She said the increased downward pressure had resulted in a broader impact on the housing market compared to the March quarter, when values were falling predominantly only in Sydney and Melbourne markets.

“Signs of a slowdown and falls in value were already evident before the rate rises, but are now becoming more widespread across Sydney and Melbourne, and beginning to impact the more expensive areas of Brisbane, Canberra and Hobart,” she said.

“Historically, premium suburbs are more volatile than the more affordable areas, values shoot up much faster during an upturn but are among the first to fall during a declining market.”

Residential housing values decline
▲ Australian residential property has continued down the path of declining values, with prices dipping 0.2 per cent nationally over the June quarter.

Sydney markets weakened significantly over the June quarter with 81.1 per cent of house markets recording a fall in values (-3 per cent).

Nevertheless, three out of four suburbs still have a median house value of more than $1 million with no house markets under $500,000.

Sydney’s unit markets were slightly more resilient with values sinking 2.1 per cent over the quarter—almost two-thirds with a median value of  between $500,000 and $1 million.

In Melbourne, the slowdown across the city’s inner east has become more widespread, with 80 per cent of its house markets falling while almost 60 per cent of unit markets recorded a decline.

“Units nationally have proven to be slightly more resilient than house markets, which largely comes down to affordability,” Ezzy said.

“While units in some of those more expensive inner-city areas are starting to decline nationally, fewer unit markets fell over the quarter than houses.”

In Brisbane, growth conditions remain positive but signs of a slowdown are looming with 11.6 per cent of  markets recording a quarterly fall in values. Only 10 of Brisbane’s 180 unit markets declined over the quarter, with four suburbs in the Logan-Beaudesert region among the country’s most affordable with median values below $250,000.

ResidentialAustraliado not useMelbourneHobartCanberraBrisbaneSector
AUTHOR
Phil Bartsch
The Urban Developer - Writer
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Article originally posted at: https://theurbandeveloper.com/articles/blue-ribbon-suburbs-on-frontline-as-market-slides