Would you believe us if we told you that despite the constant news cycle reporting record-breaking house prices, home values have actually only risen 2.8% across Australia since April 2022?
Though surprising, that’s what CoreLogic uncovered in their recently published analysis comparing property market performance before and after Australia’s historic two-year rate hike cycle. Not only does the figure contrast immensely with the 31.7% increase seen between 2020-2022, but the wider data also shows just how much the impact of rate hikes differed between cities, suburbs, and regions.
With so much talk of constantly soaring property values across the country, how could such a modest capital gain be true? Likely because many have already forgotten the short and sharp downtown (a -7.5% drop in national values) that occurred between May 2022 and January 2023 after the first few rounds of rate increases.
Across the country, data shows the percentage change in housing values ranges widely. In Sydney, house values increased by only 0.4%, while Perth’s soared 25.7%, seeing 97.3% of suburbs at a record high in April 2024. Adelaide followed closely behind at 90% and Brisbane at 85.1%.
But not all markets have shown such resilience. In Hobart, not a single suburb hit record high status – instead, 98% of suburbs saw a decline in value, with values dropping -11.2%. These figures can likely be attributed to the fact that Hobart soared in popularity during the pandemic sea change/tree change movement, only to now face a rise in vacancies after buyers and renters moved back home.
In Melbourne, where prices dropped -4.2% and 87.8% of suburbs recorded a decline in dwelling values since the rate hikes began, only six suburbs in the city’s south-east were at a record high in April. Nationally, 37.9% of suburbs recorded a decline in dwelling values since the rate hike cycle began.
Still, despite continued rate hikes over the period, a total of 43.6% of Australian suburbs hit those record highs we keep hearing about. While figures fluctuate wildly between states and suburbs, capital city suburbs led the way with 49.1% reaching a peak compared to 35% in regional areas.
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But in Sydney, where the price of house keys seemingly rises by the hour, nearly 70% of suburbs are still below their peak price, with only 30.5% of suburbs recording record high dwelling values. And across the rest of NSW, only 15.2% of suburbs are at their peak.
According to CoreLogic’s analysis, 12 of the 20 worst performing suburbs nationally for house values were in NSW – 9 of them in the Northern Rivers region which was devastated by flooding in 2022.
Market conditions aren’t expected to continue to trend this way, though. While forecasts for the remainder of 2024 remain divided, most experts are tipping Sydney’s dwelling values to rise by 7% – 9% by years end and up to 20% within the next three years as interest rate cuts and a severe supply shortage look set to shake things up.
