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CoreLogic Home Value Index: Australian housing values down -5.3% over 2022 | CoreLogic Australia
Home Value Index
January 2023
After the monthly rate of decline moderated between September and November, housing markets finished the year on a weaker note, with CoreLogic’s national Home Value Index falling -1.1% in December, taking values -5.3% lower over the 2022 calendar year.
The re-acceleration in the downwards trend was mostly driven by a worsening in the monthly rate of decline across Melbourne (which lifted 40 basis points between November’s -0.8%, and December’s -1.2% fall), but declines also accelerated across Sydney, Adelaide, Darwin and Canberra month-on-month.
On the flip side, the pace of falls eased across Brisbane and Hobart, while value movements in Perth remained slightly positive for the second consecutive month.
The -5.3% drop in housing values through 2022 marks the first time since 2018 where national home values fell over the calendar year. The 12 months to December also mark the largest calendar year decline since 2008, when values were down -6.4% amid the Global Financial Crisis, and successive interest rate rises.
Annual value falls were the most significant in Sydney (-12.1%) and Melbourne (-8.1%) where conditions peaked early in the year. Hobart (-6.9%), the ACT (-3.3%), and Brisbane (-1.1%) also recorded an annual drop in housing values, while three capitals saw values rise over the year: Adelaide (10.1%), Darwin (4.3%), and Perth (3.6%).
CoreLogic’s Research Director, Tim Lawless, said this has been a year of contrasts, with housing values mostly rising through the first four months of the year, but falling sharply as the RBA commenced the fastest rate tightening cycle on record.
“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen -8.2%, following a dramatic 28.9% rise in values through the upswing.”
Australian housing market May 2021
The housing market in Australia has defied expectations and continued to grow in May, despite fears of a drop-off.
Many experts had predicted that the ongoing property boom would fade out, driven by the end of the JobKeeper and HomeBuilder subsidies from the government.
These predictions had been helped along by the slower speed of growth in April, when auction markets were affected by Easter, school holidays and the ANZAC Day long weekend.
Markets have rebounded into May, however, with growth intensifying and ancillary factors, such as unemployment rates, economic participation and wider economic recovery continuing to drive demand.
First home buyer numbers have fallen slightly, a logical consequence of the rise in house prices that has priced many out, but auction listings are still breaking records. Clearance rates have also dropped, though that is largely due to the increased number of listings in total.
“When we were in the midst of COVID a year ago, there was a lot of uncertainty about the outlook,” said Dr Andrew Wilson, Chief Economist for Archistar. “It was uncharted waters, particularly regarding the economy. The government moved appropriately to instigate widespread and unprecedented support for incomes, but obviously it had a horizon in terms of when support packages would end.”
“I think, once we got out of lockdown, we start to see a brighten future in terms of health issues, and people started to focus on getting back on with their lives. There was a fixed period for income support announced, and we were always going to see a movement back towards normality and that would mean that people were prepared to stay on income support for the shortest time that they could. We saw that people moved quickly back into the workforce as the economy recovered and that’s been a continued process right through until JobKeeper finished at the end of March.”
“We saw signs early on, from as soon as the economy started opening up mid-year last year. People were moving back and recapturing their lives and getting back to work. That’s it really, people weren’t prepared to stay on income support longer than they had to. The economy was recovering, jobs were being created and people were motivated to go out and rediscover their old lives. The publicity around ‘the cliff’ did run out of steam when that became evident.”
“There was a little bit of headline chasing, but it was a period of high uncertainty and we really didn’t have any sort of blueprint to follow. Nothing like this had ever happened previously.”
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