Australia

Australian house prices: 300 suburbs whose values ​​have plummeted

Twelve suburbs have already lost more than $500,000 in property prices since March as soaring interest rates hit the Australian housing market.

PropTrack’s Automated Valuation Model (AVM) data shows that more than 300 suburbs across the country experienced six-digit declines in home prices in the quarter.

In percentage terms, the nation’s worst-performing suburb is South Hedland in the Pilbara region of Washington, where unit numbers fell 24.81% to a median of $213,791 in June 2022, a loss of over $70,000. have become.

Queensland’s Booval followed suit, dropping 24.64% (over $121,000) to $370,231.

But it was the capital’s wealthier suburbs that experienced the biggest losses in dollar terms, with parts of Sydney’s northern beaches and eastern suburbs, Melbourne’s Mornington Peninsula, and inner-city Perth and Canberra all losing $500,000. experienced a further decline. dollar.

Former Prime Minister Malcolm Turnbull’s Point Piper homes in the eastern suburbs recorded the biggest loss in dollar terms, with units there losing about $715,000 in value, a 14.82% drop from $4.82 million to $4.11 million. Did.

Manly came in second, losing nearly $680,000 in home prices, down 13.8% from $4.92 million to $4.25 million.

House prices fell nearly $610,000 to $2.77 million in Ingleside, a beach north of Sydney, and $600,000 to $2.51 million in Flinders, Melbourne.

Other suburbs that saw home prices drop by more than $500,000 include Sydney’s Clontarf, Dover Heights, North Bondi, Bronte, Rose Bay, Bondi Beach, Perth’s Peppermint Grove and Canberra’s Griffith.

Just behind the $400,000 range are Double Bay and Tamarama in Sydney, Red Hill in Victoria and Canberra, and Mulgoa at the foot of the Blue Mountains.

Eleanor Clay, senior economist at Proptruck, said: “Price declines are largely driven by the ‘high end’ of the market and higher value suburbs.

“Manly and Tamarama in Sydney have all posted quarterly declines.

“Even the formerly popular suburbs of the Central Coast and Melbourne’s Mornington Peninsula are declining in value.

“It’s common for the upper end of the market to experience bigger price drops, and at the moment it’s the suburbs that are home to the more expensive real estate that see the bigger price drops than the more affordable properties. .”

But it’s not all bad news for homeowners.

House prices in some suburbs are still rising, with Sydney’s inner-western Balmain East house prices rising by more than $329,000 to $3.48 million in the quarter.

Brisbane’s New Farm was second with home prices rising above $295,000 to $2.65 million. Caldale, in the Illawarra region of New South Wales, followed suit, rising nearly $289,000 to $2.47 million.

Other suburbs where house prices have increased by more than $200,000 are Newcastle East, The Rocks and Waterloo in Sydney, Bowen Hills, Teneriffe, Highgate Hill and West End in Brisbane.

“While the current extraordinary cycle of price increases is coming to an end across Australia, there are areas of the country that are bucking the price trend,” Mr Clare said.

“Brisbane, Adelaide and parts of Australia are proving to be more resilient.

“The housing market in parts of rural Australia has surged as the pandemic has sparked a boom in remote work, with ocean and wood changers looking for lifestyle places, bigger homes and beachside living. I have.”

A continued shortage of real estate available for sale, combined with the relative affordability advantage that drives demand, continues to drive prices higher in some regions, or the impact of rising interest rates weighs heavily on the market. It has just started to fall because

“As the housing price cycle matures and interest rates are now rising, some suburbs of former regional hot spots on the Sunshine Coast, the Southern Highlands and Geelong areas are beginning to see significant price declines. It’s the beginning of a pandemic,” Creagh said.

“In suburbs such as Lorne, Sunshine Beach, Miniyama and Noosa Heads, unit and home values ​​are declining quarter by quarter.”

She added that it was a similar situation in the capital, markets that have led the rise, with “northern beaches and eastern suburban lifestyles and coastal locations now seeing greater price declines.” rice field.

This was after the Reserve Bank raised interest rates for the fourth straight month on Tuesday.

A 50 basis point rise at the central bank’s August meeting took the official cash rate to 1.85%, up from a record low of 0.1% through May.

Governor Philip Lowe said the RBA had decided to raise interest rates to bring down the current inflation rate of 6.1%.

In a statement, he said it would take time to return inflation to below 3% while keeping the economy stable.

“The road to achieving this is narrow and shrouded in uncertainty, especially for global developments,” said Dr. Lowe.

“The pressure on real incomes from rising inflation, the tightening of monetary policy in most countries, the Russian invasion of Ukraine and the coronavirus containment measures in China have lowered global growth prospects. Today. is another step towards normalizing financial conditions in Australia.”

Already, rising interest rates are driving home prices down in most major cities, and borrowers are seeing their monthly payments rise.

PropTrack’s home price index shows a 1.66% price decline nationwide since March, with some regions seeing even steeper declines.

Earlier this week, Mr. Clare said, “As interest rates rise and repayments get higher, housing affordability will decline, driving prices down even further.”

Richard Dennis, chief economist at the Australian Institute, told NCA NewsWire last week that the RBA is one of the biggest threats to the economy at the moment.

“If we keep raising interest rates because inflation is higher than we would like, it could trigger a recession,” he said.

“Rising interest rates will not help prepare for a slowing global economy, but they may actually slow the Australian economy further.”

frank.chung@news.com.au

– at the NCA Newswire

Australian house prices: 300 suburbs whose values ​​have plummeted

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