In short:
The median value of Australian homes has dropped $63,400 since March.
asserted
value → drop → March
The decline is tracking faster than any past downturn over the past 40 years.
What's next?
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What → track → years
Experts predict it will be some time until interest rates start to fall and the market turns.
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market → predict → ?
National house prices have fallen for a seventh consecutive month, with the speed of the decline in home values tracking at the fastest pace seen over the past 40 years, according to property research group Cotality.
uncertain
speed → fall → Cotality
The index shows the median national house price now stands at $884,855.
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price → show → 884,855
Cotality head of research Gerard Burg said the speed of decline was tracking faster than any previous downturn over the past 40 years, with capital city values down 8.1 per cent in seven months.
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values → say → months
Virtually every suburb across Brisbane, Perth and Adelaide has recorded a drop in values over the past three months as buyers struggle to get loans because of higher interest rates.
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buyers → record → rates
It sits alongside investor demand also waning because of the federal government's budget changes to property tax breaks.
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It → sit → breaks
"This is really a demand-led downturn," Mr Burg said.
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Burg → lead → ?
"That's reduced the borrowing capacity of households, but also increased the repayments for people to make on a mortgage, and it's pushed a lot of buyers to the side.
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it → reduce → side
"
Mr Burg is among many economists anticipating higher rates for longer and further house price falls.
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Burg → anticipate → falls
"We are already on track to see the largest downturn across the last 40 years,"he said.
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We → see → years,"he
"The previous record was 2017 through 2019, which stood at 8.2 per cent [falls] across the combined capital cities.
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which → stand → cities
Now, at the moment, as of October, the downturn that we've seen over the past seven months is 8.1 per cent [falls], so it looks like we're easily going to push past that mark.
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we → see → mark
"
How much further will house prices fall?
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prices → fall → ?
The number of home sales has dropped sharply as demand weakens.
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demand → drop → sales
Cotality puts the number of home sales over the past three months 23 per cent lower than a year ago and 18 per cent below the previous five-year average.
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Cotality → put → average
With fewer buyers, it has become harder to sell homes.
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it → become → homes
Auction clearance rates across the combined capitals are consistently tracking below 50 per cent, while private treaty metrics have also weakened.
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metrics → combine → cent
Mr Burg said buyers would hold back until the Reserve Bank of Australia indicated a different direction on rates, and that likely would not happen until the latter half of 2027.
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that → say → 2027
"The eventual recovery that we do see in the housing market is likely to be more subdued than we've seen in previous episodes,"Mr Burg said.
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Burg → see → market
"It [the RBA] doesn't necessarily require rates to come down, but [give] the clear signal that that is the direction that they are going to take."
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they → require → that
Domain's chief economist Nicola Powell says it could be well into next year before rate cuts are on the agenda.
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cuts → say → agenda
"We've already seen about a 6 per cent shave from the median house price, so the reality is a 10 per cent drop in price is quite possible,"Ms Powell said.
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Powell → see → price
"We need something to change to improve buyer confidence.
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We → need → confidence
And that isn't going to come at least until we have the discussion of a potential rate cut.
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we → go → cut
And that's unlikely to happen until the latter part of 2027."
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that → happen → 2027
Inquiries at some open homes down 300 pc
Harcourts real estate agent and auctioneer Sam Devlin, who sells homes in Brisbane, said over the past six months enquiries at open homes had been down in some instances by 300 per cent.
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enquiries → sell → cent
"That's been brought on since the May budget," he said.
"
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he → bring → budget
The government's taxation policies around negative gearing and capital gains tax have certainly affected what is happening there."
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what → affect → gearing
Mr Devlin said even buyers looking to upsize were heading to auctions unsure whether they could stump up the cash.
"
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they → say → cash
Right now, we're seeing a real lack of confidence from people who have to sell homes, being able to transact without subject to sale clauses,"he said.
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who → see → clauses,"he
"There would be more interest if there was more confidence in the market that buyers could actually sell the house that they're already in."
Jin Ling at real estate agent Vic Prop sells homes in Melbourne's eastern suburbs.
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Ling → be → suburbs
He said enquiries were down and buyers were far more cautious.
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buyers → say → ?
"Right now, they don't have the confidence that, if rates go up two or three more times over the next 12 months, whether that's a comfortable position for them," he said.
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he → have → them
"They're thinking, 'Do we wait 12 months?
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we → think → ?
Do we wait to see what the market does?
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market → wait → what
Do we wait for prices to maybe potentially pull back a bit more before kind of pulling the trigger?"
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prices → wait → trigger
Mr Ling said it could take years for property values to rise strongly again.
"I think it'll be a three-to-four-year period, where hopefully we can see a level of recovery," Mr Ling said.
uncertain
Ling → say → recovery
In the meantime, some buyers could get better value.
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buyers → get → value
…and 11 more, not listed.
The Aporia
