Property prices decline in Sydney and Melbourne

By Jon Bragg

April 04 2022
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While growth has continued across the country overall, prices have fallen in Australia’s two largest capital cities.

National house prices lifted by 0.7 per cent in March, according to the latest figures from CoreLogic, as ongoing growth in smaller markets offset declines in Sydney and Melbourne.

Compared to February, property prices rose by 2.0 per cent in Brisbane and 1.9 per cent in Adelaide while increases of 1.0 per cent were recorded in both Perth and Canberra.

Meanwhile, Sydney suffered its second monthly decline in a row with a fall of 0.2 per cent in March, while prices in Melbourne contracted 0.1 per cent.

“Virtually every capital city and major rest-of-state region has moved through a peak in the trend rate of growth some time last year or earlier this year,” said CoreLogic research director Tim Lawless.

“The sharpest slowdown has been in Sydney, where housing prices are the most unaffordable, advertised supply is trending higher and sales activity is down over the year.”

The annual growth rate for national property prices was 18.2 per cent, falling below 20 per cent for the first time since August last year.

Mr Lawless warned that annual growth was expected to fall sharply in the next few months when the strong gains of early 2021 are no longer included in this figure.

Over the first quarter of 2022, prices rose by 2.4 per cent nationally, including an increase of 1.5 per cent in the combined capitals and 5.1 per cent in regional areas.

“There are a few exceptions to the slowdown, with regional South Australia recording a new cyclical high over the March quarter and some momentum is returning to the Perth market where the rate of growth is once again trending higher since WA re-opened its borders,” noted Mr Lawless.

Prices in regional South Australia surged by 2.8 per cent during March and are up 7.4 per cent over the past quarter.

Growth in the regional areas of NSW (1.8 per cent) and Victoria (0.9 per cent) also outperformed their respective capital cities, while regional Queensland (2.0 per cent) saw similar growth to Brisbane.

To help explain the strong housing conditions in regional areas, CoreLogic pointed to data from the Australian Bureau of Statistics (ABS) that found the number of residents in regional areas increased by nearly 71,000 in the last financial year while the number of people living in capital cities fell by about 26,000.

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