Housing value drops in Sydney and Melbourne in early 2022, says CoreLogic

Property analysts at CoreLogic have noted a quarterly decline in dwelling values across 24% of suburbs in capital cities, most of them in Sydney and Melbourne.

Using its mapping software and its Home Value Index, CoreLogic analysed 3,111 capital city houses and units to give a national overview of median values across Australia.

March’s Home Value Index showed that national dwelling values rose 2.4% in the first quarter of 2022, which is notably less than at the same period in 2021.

“These same areas are seeing some of the bigger jumps in advertised stock levels too so as we see new demand for housing in these areas decline buyers have more choice, more time for decision-making, and more power at the negotiating table,” said CoreLogic’s head of research, Eliza Owen.

Sydney’s dwelling value decline

In Sydney, 917 house and unit markets were analysed for the March 2022 quarter, and 384 (38.6%) were seen to have a decline in value. The majority of the declines came from houses rather than units.

“The quarterly figures confirmed there was a gradual shift from a prolonged period of broad growth to a multi-speed market that differed between capital cities, regions and property types,” said Owen.

This same pattern is mirrored across Melbourne.

Melbourne dwelling value decline

There were 648 dwellings analysed in Melbourne’s market, and 46.6% were seen to  decrease in value in the quarter.

“Melbourne had recorded two monthly market declines in four months and suburb movements confirmed the city was shifting into the downswing phase in its cycle,” Owen said.

“Quarterly declines have been more skewed towards the inner and inner-east of Melbourne, as higher fixed mortgage rates and affordability constraints may be seeing demand slip from the very top end of the market.”

“Surge in more affordable parts of the city could be a result of homebuyers looking for alternative options after being priced out of more central locations.”

Dwelling values in other capital cities

While there have been declines in Sydney and Melbourne, the same cannot be said about other parts of the country.

Currently, Brisbane and Adelaide continue to see growth in home values. Of the 651 places analysed across the two cities, not a single one saw a decline in values.

“Conditions across southeast Queensland continue to be supported by strong interstate migration from those relocating from NSW and Victoria and the relatively affordable housing stock,” said Owen.

“For those migrating from the southern states, a typical house in Brisbane was $857,000 in March, significantly less than Sydney’s median of $1.4 million.”

Even though Adelaide saw increases in value, it’s still the country’s third most affordable capital city, right behind Perth and Darwin.

In Canberra, there were no declines in the unit market, but saw a 5.2% value decrease in the house market.

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