Crash Landing: The Neighborhoods Where Home Prices Plummeted in August
Australian House Prices: A Mixed Bag
Key Points
29.2% of homes in 3,644 Australian towns and cities saw their house prices fall in August compared to three months earlier
80% of Melbourne homes saw house prices fall in 3 months
* Perth is the only capital city where house prices have risen across all regions
House Prices Fall in 3,655 Australian Towns
An analysis of house price changes in the three months ending in August by property research company CoreLogic reveals that house prices fell in 3,655 Australian towns, or 29.2% of all homes. This is a significant increase from August last year, when 17.2% of homes in the same towns fell.
Victoria and Melbourne Worst Hit
House price declines have been more widespread in Victoria and Melbourne than elsewhere in Australia. According to CoreLogic, around 80% of Melbourne suburbs saw a decline in house values between June and August. Crib Point on the Mornington Peninsula and Cowfield East, in Melbourne’s south, saw house prices fall by 7% and 6% respectively. The median property price in Crib Point fell by more than $50,000 to $750,000 in August.
Increased Supply and Downward Pressure
CoreLogic economist Caitlin Easy attributes the decline in house prices to increased supply and downward pressure on values. “About 80% of Melbourne homes have seen a quarterly decline in value,” she said. “There have been around 30% more home advertisements in this period than the previous five-year average.” This has been concentrated in wealthier suburbs, with every home in the Mornington Peninsula falling in value.
Sydney House Prices Also Down
Sydney house prices were also down, according to CoreLogic. About 26% of houses in its Sydney suburbs fell in value. Rodd Point had the biggest drop, with the median house price there falling nearly $300,000 in August to $3.1 million, compared to three months earlier. Concord’s median house price fell nearly $150,000, or 5.2%, to $2.6 million.
Perth Bucks the Trend
Perth is the only capital city where house prices have risen across all regions. In Marmion, in Perth’s north-west, median house prices have risen by 1.8%, while in Henley Brook, in Perth’s north-east, median prices have risen by a massive 10.6%. This is attributed to the increasing number of migrants moving to Western Australia from other states, limited new housing supply, and the lower housing prices compared to Sydney and Melbourne.
What’s Driving the Market?
The analysis suggests that the increasing number of migrants moving to Western Australia from other states, limited new housing supply, and the lower housing prices compared to Sydney and Melbourne, as well as the good economic situation, seem to have helped to increase housing prices in Perth. In contrast, the increased supply and downward pressure on values in Melbourne and Sydney have led to a decline in house prices.