Slowing national home price decline: Latest Proptrack stats

Key takeaways

National home prices recorded a small fall of 0.09% in January 2023, bringing values down 4.51% from their peak in March 2022 according to Proptrack

Prices fell in every capital city, except Perth (0.06%) and Darwin (0.00%) where they held at peak levels, with Canberra (-0.24%) and Melbourne (-0.22%) recording the largest falls in January.

However, the worst of the downturn appears to have passed.

Despite recent falls, prices nationally are still 28.5% above their pre-pandemic levels.

Since their respective peaks, home prices have fallen at the fastest pace in more than a decade in Sydney, Brisbane and Hobart.

Home prices in Canberra have recorded both the fastest and deepest decline in over ten years.

Regionally, home prices in WA fell the fastest in January, slipping 0.27%. Regional South Australia continues to defy the downturn, with prices rising 0.46% to a new peak.

Still, regional prices have held up better than capital cities, falling 0.03% in January to sit 0.32% above their level a year ago. In the capital cities, prices fell 0.11% but are now 4.68% below their level a year ago.

While property prices are still declining, the latest Proptrack stats show the rate of decline is slowing and capital city prices remain well above pre-pandemic levels.

The housing market continues to adjust in the aftermath of the COVID-19 pandemic with the latest data from PropTrack showing just a 0.09% fall in January 2023.

Despite this, prices in all capital cities remain above pre-pandemic levels.

Ms Eleanor Creagh, PropTrack's Senior Economist commented:

"However, the worst of the downturn appears to have passed.

The rapid pace of price falls seen in June and July 2022 when interest rates first started rising has subsided and price falls have eased in most capital cities in recent months.

National home price falls have also slowed, declining just 0.09% in January 2023.

Despite the pace of declines easing in recent months, prices in Sydney, Brisbane, and Hobart have fallen at the fastest speed in more than a decade.

Canberra has so far seen both the steepest and deepest decline over the same period."

State of the states

Sydney

According to the report, Sydney home prices recorded a slight 0.06% fall in January and are now down 7.27% over the past year.

Prices have fallen persistently since March 2022, with Sydney seeing the most significant falls of any market and its fastest (but not deepest) price falls in over a decade.

As interest rates have risen, home prices have fallen quicker across more expensive regions and property types.

However, the magnitude of price declines in Sydney has eased in recent months from the faster pace seen in June and July last year.

Melbourne

Meanwhile, Melbourne's home price falls eased in January, though they still fell at one of the fastest paces (- 0.22%) out of the capital cities in the month.

Prices are now 5.79% below their January 2022 level and 6.42% below their March 2022 peak.

Price falls are expected to continue in Melbourne in the period ahead as interest rates continue to rise, further reducing borrowing capacities.

Brisbane

Prices recorded a slight fall (-0.07%) in Brisbane in January and are now down 0.24% over the past year.

Conditions in Brisbane have quickly shifted due to the substantial tightening in interest rates seen last year.

Prices are now 3.76% below their peak recorded in April 2022, with Brisbane recording its fastest (but not deepest) decline in home prices in more than a decade.

However, the magnitude of price declines in Brisbane has eased in recent months from the faster pace seen last year.

Other capital cities

• Perth home prices recorded a slight increase (+0.06%) in January, with the city continuing to hold up better than other capitals. Prices have increased 3.1% over the past year and are just 0.50% below peak levels recorded in October last year.
• Adelaide, the strongest-performing capital city market over the past year, saw home prices fall 0.14% in January. Prices are now down 0.21% from their October peak. However, they remain 7.94% above their January 2022 level. The comparative affordability of the city’s homes has seen prices holding up better as interest rates have quickly risen.
• Home prices in Hobart fell a slight 0.05% in January to sit 2.88% below their peak in April 2022. Hobart has recorded its fastest (but not deepest) decline in more than a decade. However, the magnitude of price declines in Hobart has eased in recent months from the faster pace seen last year. Prices are 1.46% below levels seen in January last year and are up 43.9% compared to pre-pandemic levels in March 2020.
• Darwin home prices were flat in January, holding out at peak levels. Home prices have increased 1.5% over the past year and remain 28% above pre-pandemic levels.
• Prices in Canberra fell 0.24% in January. Prices are now sitting 5.59% below their peak in March 2022, with home prices recording both the fastest and deepest decline in more than a decade in Canberra. However, the magnitude of price declines in Canberra has eased in recent months from the faster pace seen mid-last year.

Outlook for the year

Well, a further 25bp rate rise in February, taking the cash rate to 3.35%, is widely expected.

Ms Creagh shared her insights on how this will affect the market:

"The continued reduction in borrowing capacities will weigh on prices in the period ahead, though the declines will likely continue at this slower pace as interest rates approach their peak.

Home prices may begin to stabilise as interest rate uncertainty reduces later in the year."

Source of charts and commentary: PropTrack Home Price Index - January 2023

About Michael Yardney Michael is the founder of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.