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Cotality’s national Home Value Index fell 0.9 per cent over the month, taking national values 3.1 per cent lower over the quarter and 3.6 per cent below their March peak.
The decline was broad-based, with every capital city except Darwin recording a fall over the three months to August.
Cotality research director Tim Lawless said the downturn had become more widespread across the market as the year progressed.
“What started as a more concentrated easing across higher-value segments has now become a much more generalised softening, with the vast majority of capital city suburbs recording some level of decline,” Lawless said.
The proportion of capital-city suburbs recording a fall in value more than doubled through winter, rising from 45.8 per cent in autumn to 93 per cent.
Cotality’s median dwelling value across the combined capitals is now $990,394, while the national median sits at $912,885.
Sydney continues to lead the downturn
Sydney recorded the largest monthly decline, with values falling 1.4 per cent in August and 4.7 per cent over the quarter.
Values are now 7.1 per cent below their February peak, with Cotality saying the rate of decline has outpaced the city’s 2022-23 correction, when values fell 6.6 per cent over the equivalent period following the market peak.
“Sydney continues to lead the downturn,” Lawless said.
“The combination of a sharp drop in demand and higher than average advertised stock levels is weighing more heavily on Australia’s largest housing market.”
Melbourne, Canberra and Brisbane also recorded monthly declines of at least 1 per cent, falling 1.1 per cent, 1.1 per cent and 1 per cent respectively.
Adelaide and Perth both fell 0.8 per cent, while Hobart declined 0.2 per cent.
Darwin was the only capital to record an increase, rising 0.6 per cent in August and 0.9 per cent over the quarter.
Cotality’s figures showed the more expensive end of the market continued to record weaker conditions across most capitals, although the gap with lower-value housing has narrowed.
“The narrowing performance gap between the upper and lower quartiles is another sign this downturn is broadening,” Lawless said.
“Premium markets are still generally recording weaker conditions, but lower-priced housing is becoming less insulated as affordability pressures and softer demand weigh more evenly across the market.”
Buyer demand weakens
The weaker market has been accompanied by a decline in transaction activity, with Cotality’s quarterly estimate of home sales tracking 15.5 per cent below the same time last year and 11.5 per cent below the five-year average.
Brisbane, Perth and Sydney recorded the largest falls in transaction activity, with estimated sales volumes down more than 20 per cent from a year earlier.
“The softer trend in values is underpinned by weaker transaction activity,” Lawless said.
“Sales volumes are tracking well below both year-ago levels and the five-year average, which points to a clear reduction in buyer demand.”
At the same time, advertised stock has continued to build up.
Capital-city listings were 24 per cent higher than a year ago and 8 per cent above the five-year average in the four weeks to 30 August.
That came despite the flow of new listings being 6 per cent lower than a year ago and 8 per cent below the five-year average.
“Higher advertised stock levels are simply a factor of a slower rate of absorption,” Lawless said.
“Longer selling times, larger vendor discounting and persistently low auction clearance rates all point to a buyer's market, yet buyers are lacking the confidence to transact at the moment.”
Regional markets prove more resilient
While the downturn has also spread beyond the capital cities, regional markets have remained more resilient.
Cotality’s combined regional index fell 0.4 per cent in August and was 1.2 per cent lower over the three months to August.
Regional South Australia was the only broad rest-of-state market to avoid a decline over the quarter.
The median value across combined regional markets was $764,020, compared with $990,394 across the combined capitals.
PropTrack records fifth monthly fall
Separate figures from PropTrack also recorded a fifth consecutive monthly decline, although the fall was smaller than Cotality’s measure.
PropTrack’s Home Price Index showed national home prices fell 0.2 per cent in August, leaving values 2.7 per cent below their March peak but still 1.8 per cent higher than a year earlier.
Capital-city prices fell 0.3 per cent over the month and were 3.6 per cent below their peak, while regional prices were flat in August and remained 6.6 per cent higher than a year earlier.
PropTrack senior economist and report author Eleanor Creagh said higher interest rates were continuing to weigh on borrowing capacity and housing demand, while regional and unit markets had proved more resilient.
“Further price falls are likely to be seen over the coming months, particularly across the capital cities,” Creagh said.
“Uncertainty around tax changes, the outlook for interest rates, and ongoing price falls, continue to weigh on confidence, keeping some buyers on the sidelines.”
[Related: Westpac forecasts slump in investor activity following budget]
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