All of the Australian capital cities barring Darwin are now experiencing a housing downturn. Similarly, all regional areas outside of South Australia have experienced falls in prices.
Sydney has experienced the largest drop, recording a -2.3% over the month of August, which Brisbane recording a fall of -1.8%.
Although the regional markets recorded a stronger increase during the boom, values have fallen close to in-line with the capital cities. Last month, home values were down -1.5% in Regional areas compared with a -1.6% across the combined capitals. This contrasts when compared to the period between March 2020 and January 2022, with regional dwelling values increased more than 40% and 25.5% for the combined capital cities.
After the peak in annual growth rate of 21.3% during November 2021, the annual growth rates across the capital cities in Australia has decreased to 2.2%. Values across Sydney and Melbourne are now recording values of -2.5% and -2.1% respectively over the year to date.
Housing values in most other regions remain 15% above the levels recorded in March 2020.
With regards to stock, Melbourne and Sydney have seen advertised stock rise to above average levels with an anticipation for other capitals to rise during spring and demand continues to taper. Overall, demand for the three months to August was -14.8% below the same period last year with larger declines in Sydney, Canberra and Melbourne with -35.4%, -18.9% and -16.5% respectively.
With regards to the rental market, rental rates increased a further 0.8% in the month of August after a peak of 1% in May. This is underpinned by low supply, worsening affordability and an increase in overseas migration.
Gross dwelling yields in capital cities reached a record low of 2.96% in February 2022, however this appears to have recovered with an increase to 3.29% in August. This is still below the pre-pandemic decade average of 4%.