Australian home values post steepest seven-month fall in 40 years
Australian home prices fell for a seventh consecutive month in October, with the pace of decline across capital cities the fastest in 40 years. The downturn matters as the Reserve Bank prepares to announce its latest rate decision, with economists widely expecting another increase that could further weigh on buyers and sellers.
Cotality recorded a 1.2 per cent national fall, putting the median dwelling value at $884,855, 6.7 per cent below its March peak, a drop of about $63,400. Capital city values fell 8.1 per cent over seven months; Brisbane and Perth led October’s declines at 2 per cent and 1.7 per cent. Home sales were 23 per cent lower than a year earlier, while properties took a median 39 days to sell.
In short
- Australian home prices fell for a seventh month.
- Capital city values are down 8.1 per cent in seven months.
- Sales have weakened as another rate decision looms.
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The strongest fair case each way — we don't pick a winner.
The case for
A sharp fall in home values may ease pressure on buyers who have been priced out, improve affordability over time and reduce the risk of prices being sustained by easy credit. If interest rates rise to curb inflation, accepting some housing market weakness may be a reasonable cost of restoring price stability and protecting household purchasing power.
The case against
Rapid, widespread falls can erode homeowners’ savings and confidence, and leave recent buyers especially exposed if they owe more than their homes are worth. Further rate rises could deepen the downturn, deter sales and building, and cause broader economic harm; policymakers should weigh those costs carefully against the case for tighter monetary policy.
Explained simply
Australian home values are influenced by borrowing costs, household incomes and the balance between homes for sale and people looking to buy. The Reserve Bank of Australia sets the official interest rate, which affects mortgage costs and can change how much buyers can borrow.
Cotality is a property data company that tracks home values and sales. Its figures cover the national market and individual capital cities, where prices can move at different rates.
Changes in home values matter to people buying or selling, and to households whose wealth is tied up in property. They also affect housing affordability and can shape debate about interest rates and the wider economy.
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Originally published by Daily Mail as “Australian property prices plunging at fastest rate in 40 years after seven straight months of falls as rate decision looms”.