[New Video] Melbourne’s Property Market Update; July 2018 – By Konrad Bobilak

by | Jul 8, 2019 | property

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Australian home prices are falling…Or Are They?

You see, some homes are falling faster than others. AND some aren’t falling at all.

That’s the finding of new research from CoreLogic, which found that rather than broad-based declines across the nation, it’s actually only Australia’s most expensive properties taking the hit at the present.

“National dwelling values have fallen by 0.3% over the three months to April 2018,” the group says.

“While headline figures have slopped lower over the period, across the 10 value-based segments of the national market, values have only fallen across the 8th, 9th and 10th most expensive segments while the 7th most expensive segment recorded no change in values.”

“While the most expensive properties in the country have seen value falls over the quarter, the most affordable 10% of properties have recorded the greatest quarterly value increase, up 1.6%”

The point is rammed home by the chart below from CoreLogic, showing that prices over the past three months have only fallen in homes valued between $635,437 and above, with prices for more lower valued housing actually increasing over this period.

Quarterly and annual change in valued Melb April 2018

“Only the most expensive 10% of properties recorded a fall in values over the year and all other sectors recorded annual growth in excess of the 0.2% national average,” CoreLogic says.

“This data highlights just how weakness across the most expensive property values can exacerbate weakness across the broader housing market.”

The group says homes in low and mid-tier price ranges may be supported by a surge in first home buyer activity, thanks in part to stamp duty discounts introduced by the New South Wales and Victorian state governments last year, along with mounting affordability constraints at the higher value end of the market.

“The country-wide trends will also reflect that fact that more expensive properties are located in the capital cities, or more specifically Sydney and, to a lesser extent, Melbourne,” it says.

“The overall weaker performance across these two housing markets will place some downwards bias across the higher deciles.”

In contrast to nationally where values have fallen only at the very top of the market, almost all homes in Sydney have experienced price declines over the past year. Around half of all homes have also fallen in Melbourne, concentrated in the upper-end of the market.

Because of the sheer size and cost of housing in these cities, when prices fall there, it invariably acts to drag down the national average.

And while there are exceptions in individual regions, when you talk about the top end of the Australian housing, you’re largely talking about Sydney and Melbourne.

Indeed, outside of Australia’s mining capitals of Perth and Darwin, prices over the past year in other location are almost unilaterally higher.

“The broad trend findings in the report showed that values have been falling on an annual basis across the tenth decile, the premium end of the market, while all other valuation deciles enjoyed positive, albeit restrained, growth over the twelve months to April,” said Cameron Kusher, Research Analyst at CoreLogic.

So no, “Australian” home prices aren’t falling. Only some are. Mostly in Sydney and pockets of Melbourne, along with Perth and Darwin.

In fact, as uneducated media commentators and so called academic ‘experts’ would have you believe that the sky is falling on the Melbourne property market, some suburbs and specific types of properties are booming!

Melbourne’s bridesmaid suburbs have seen the strongest unit price growth over the past year, as down-sizers and first-home buyers jostle to buy the next-best thing.

The nine suburbs with the highest unit price increases also saw units outperform houses for growth in the year to March, according to Domain Group data.

Macleod topped the list with just over 58 per cent growth to a median unit price of $640,000, whereas house prices in the suburbs grew by a much lower 9.5 per cent to $912,500.

Kew East, Strathmore, Moorabbin and Heidelberg Heights each saw unit prices increase by more than 35 per cent for the year, outpacing house price growth in these suburbs, which sat between 0.06 and 18 per cent.

Kind regards,
Konrad Bobilak