Australia: Correction in dwelling prices continues - Westpac

Matthew Hassan, Research Analyst at Westpac, points out that Australia's housing market continues to correct as the CoreLogic home value index, covering the eight major capital cities, fell 0.6% in October to be down 4.6%yr.

Key Quotes

“Note that revisions to historical estimates have lowered the annual pace of price decline by around 0.4ppts nationally and around 1ppt for Sydney.”

“Both houses and units saw similar sized declines in Oct although the price adjustment continues to be more pronounced across houses, –5.1%yr nationally vs –3.2%yr for units. Again this partly reflects the stronger gains in preceding years. It does however imply that weakness to date has been unrelated to the large increase in new apartment supply.”

“The breakdown by tier continues to show more widespread weakness in recent months but a more pronounced decline in top tier prices over the last year: the 'bottom 25%' down –0.3%mth, –0.9%yr; the 'middle 50%' down –0.5%mth, –2.7%yr; and 'top 25%' down –0.8%mth, –7.7%yr.”

“More generally, the spread of weakness across price tiers and geographies has continued to widen. Our estimates suggest just under 80% of all dwellings (by share of dwelling stock) have recorded price declines over the last 6mths with just under 60% recording annual price declines. About one in five properties are experiencing annual price declines of over 5%yr, with closer to two in five in NSW.”