According to the latest data from PropTrack, national home prices have fallen for the eighth consecutive month, largely due to rising interest rates.
Nationally, a fall of 0.16 percent was registered in November, while prices in the capital are now 3.09 percent below the level of a year ago.
Darwin and Melbourne experienced the biggest declines, but prices in Adelaide rose by 0.25 percent to a new high.
PropTrack senior economist Eleanor Creagh said rising interest rates had quickly rebalanced the housing market after last year’s “extreme” growth.
“National house prices have fallen for the eighth consecutive month, with the fastest interest rate tightening cycle since the 1990s weighing on house prices in most parts of the country,” she said.
PropTrack senior economist Eleanor Creagh says rising interest rates have quickly rebalanced the housing market.
“While the pace of price declines remains significantly slower than the larger declines seen in June and July when interest rates first started to rise, the downturn has deepened as interest rates continue to rise.”
Ms Creagh said a further rate hike of 0.25 per cent in December, taking the cash rate above 3 per cent, was “almost certain”.
“With additional rate hikes on the horizon, borrowing costs will continue to rise and maximum borrowing capacity will continue to decline,” she said.
“The sharp reduction in borrowing capacity implies further price falls.”
But Ms Creagh predicted price falls were likely to ease once interest rates stopped rising next year.
Annual change in house prices. Image: PropTrack
Prices fell by 0.14 percent and are now 6.44 percent lower than last year.
They have been falling since March and Sydney has experienced the biggest falls.
Prices fall fastest in expensive regions and property types as interest rates have risen.
“Sydney, the most expensive capital nationally, is the hardest hit by these effects,” said Ms Creagh.
“However, the pace of price declines in Sydney has slowed from the faster pace seen in June and July.”
A slight fall of 0.04 percent in November has now brought Brisbane 2.71 percent below its April high.
“Brisbane is the second strongest capital city, with prices up 4.72 per cent over the past year,” Ms Creagh said.
“However, conditions in Brisbane have changed rapidly due to the rapid pace of rate hikes.”
WA’s capital is holding up better than other capitals, despite a small drop of 0.04 percent.
“Prices have risen 4.13 per cent over the past year and remain just below peak levels,” said Ms Creagh.
Prices fell by 0.49 percent to just 0.77 percent above November levels last year.
The Victorian capital fell 0.33 percent, the second largest drop among capitals.
Prices are now 4.49 percent below November 2021 and 5.30 percent below their recent peak.
“The price declines in Melbourne are expected to continue for the foreseeable future as interest rates continue to rise, further reducing borrowing capacity,” Ms Creagh said.
In the best performing capital of the past year, prices rose by 0.25 percent to a new high.
Adelaide has recorded an annual growth rate of 12.63 percent.
“Demand for more affordable regions and larger homes has boosted the Adelaide market and is likely to continue to do so,” said Ms Creagh.
Down 0.27 percent, Hobart now has 2.92 percent below its April high.
However, prices remain 1.06 percent higher than last November’s level and are 43.8 percent higher than before the pandemic.
Prices in Canberra were relatively flat in November, falling just 0.02 percent.
Prices are now 4.20 percent below their peak in March and below their level in November 2021.