In short:
House prices have fallen across every capital city for the first time in 15 years, Domain reports.
asserted
Domain → fall → years
Data shows Australia's most expensive homes have recorded the biggest drops this year, while lower-value homes have remained largely stable.
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homes → show → drops
Experts say increasing interest rates and lower confidence in the market are driving the downturn.
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rates → say → downturn
House prices have fallen 4.7 per cent, the steepest quarterly drop on record, according to new data from Domain.
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prices → fall → Domain
Prices dropped in every capital city in the September quarter, the first time in 15 years and only the second time on record.
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Prices → drop → record
The real estate platform's data showed the sharpest decline was in Perth, where prices dropped 7.4 per cent.
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prices → show → Perth
Combined capital city house prices fell to $1,226,566.
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prices → fall → 1,226,566
Domain said markets that started the year in very different positions "are now moving in the same direction".
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that → say → direction
Australia's biggest property markets of Sydney and Melbourne recorded their largest quarterly house price drop in four years, falling 4.7 per cent and 3.3 per cent respectively.
Unit prices also dropped by 3.5 per cent, the second consecutive quarter of both property types declining.
It marked a clear shift in the housing cycle, according to Nicola Powell, Domain's chief residential economist.
uncertain
It → record → Powell
"What began as weakness concentrated in some cities has broadened considerably," Dr Powell said.
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Powell → begin → cities
"The balance of power has shifted towards buyers.
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balance → shift → buyers
"Homes are taking longer to sell, there is greater scope to negotiate, and sellers are having to be more realistic about price expectations.
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sellers → take → expectations
"
The cumulative impact of the rate rises, lower affordability and cost of living pressure has reduced demand, according to Gerard Burg of data firm Cotality.
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impact → reduce → Cotality
"It's been a demand-led downturn,"Mr Burg said.
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Burg → lead → ?
Australia's most valuable homes falling the most
While all major markets across the country have joined the downturn, prices have not been dropping equally within cities.
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prices → fall → cities
Australia's most valuable homes are dropping the most, while lower value homes were relatively stable in three months to September, according to property data firm Cotality.
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homes → drop → Cotality
In Sydney, the most valuable quartile of homes dropped more than twice as much as the least valuable quartile.
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quartile → drop → quartile
Nationwide, lower value homes have experienced much slower drop in prices, Cotality said.
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Cotality → experience → prices
Prices grew in Darwin's lowest value quartile.
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Prices → grow → quartile
The heavier downturn in the more expensive properties is a result of fewer buyers and higher borrowing costs, according to property economist Cameron Kusher.
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downturn → accord → Kusher
"They've typically seen larger increases in values over recent years and when you see that market slowdown, there's overall fewer buyers for those properties," he said.
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he → see → properties
However, he said the ultra-top end of the market had remained largely stable.
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end → say → market
Mr Burg agreed, saying the lower-priced homes remained affordable to a higher number of buyers.
"The median house really appears kind of out of reach of the median income household across much of the country,"he said.
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house → agree → country,"he
Prices were falling before federal budget
The federal budget was a factor, but not the only factor, in house price falls, according to Mr Kusher.
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budget → fall → Kusher
House prices peaked last year, and had already begun to drop before the changes to investment taxes in May's federal budget, both Mr Kusher and Mr Burg noted.
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Kusher → peak → budget
Mr Burg said prices were already falling in many capital cities, and the three consecutive interest rate hikes had dampened confidence in the market.
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hikes → say → market
Auction activity, a common gauge of market confidence, has roughly halved compared to last year, with a total of 1,423 auctions across capital cities last week, according to Cotality.
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activity → halve → Cotality
"Confidence has really evaporated.
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Confidence → evaporate → ?
Affordability is very stretched and borrowing capacity is reduced dramatically," Mr Kusher said.
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Kusher → stretch → ?
"People just aren't in a position or able to pay the prices that a lot of these properties are worth at the moment."
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lot → pay → moment
He said home ownership rates had not moved much since the May budget changes, as a result of lower buyer confidence and stretched affordability.
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rates → say → confidence
"The first time is pretty scary as it is, and I think a lot of them are looking at it and saying, 'Well, prices are falling, why would I jump in now when there's quite a lot for sale, if I wait another six or 12 months properties will probably be cheaper,'" he said.
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he → think → sale
"I just don't think first home buyers have that urgency anymore."
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buyers → think → urgency
He said prices would be unlikely to return to their previous heights, at least not in the short term.
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prices → say → term
"I think this downturn is probably going to drag on a bit longer than people expect, and it probably will until it looks like interest rates are going to actually be reduced again," he said.
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he → think → ?
The Aporia
