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National dwelling values have fallen by 7.4 per cent from their October 2017 peak, and while this is often quoted, it might be more useful to understand how much that equates to in dollar terms, according to the latest CoreLogic Property Pulse.
CoreLogic research analyst Cameron Kusher said that the dollar values provide an important contextual framework.
“While a values percentage fall indicates how the market is fairing, seeing the actual value of the declines is a stark reminder of the actual losses,” he said.
“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.”
Mr Kusher expects declines 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.”
He said that based on the median dwelling value at the time of the market peak, a 7.4 per cent fall in national dwelling values translates approximately into a $40,590 decline in dwelling values.
“Looking at falls across the combined capital cities, the decline has been larger than national falls, with values 9.2 per cent 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 per cent or $9,464 from their May 2018 peak.”
CoreLogic has found that Sydney values are 13.9 per cent lower than their peak, or down by $124,739. In regional NSW, values have declined by 4.1 per cent or $18,674. In Melbourne, dwelling values have fallen by 10.3 per cent or $71,404. Regional Victoria values are $2,749 off, having fallen by 0.8 of a percentage point.
In Queensland, values are $7,796 down, or 1.6 per cent, in Brisbane; and $18,773 lower, or 4.9 per cent, in regional markets. Adelaide is off $2,307 or 0.5 of a percentage point, and regional SA values are $8,623, or 3.4 per cent, lower.
In WA, Perth is down by 18.1 per cent, or $97,797, and a whopping 31.6 per cent, $118,734, in the regions.
Darwin values are down by 27.5 per cent, or $145,980, but in regional NT, the falls have been much more moderate, at 7.9 per cent or $31,761. In Canberra, values are 0.2 of a percentage point, or $1,071, off their peak.
Hobart and regional Tasmania are the only two major regions of the country in which values are yet to have fallen from their peak.
Mr Kusher said that 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 1960s, and potentially moving even lower later this year, active buyers are back in the driver’s seat to take advantage of improved housing affordability and the low cost of debt.”
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