How Properties Have Changed In Value From Their Peak
National dwelling values haven fallen by -7.4% from their October 2017 peak through to the end of March 2019. Whereas this figure is usually quoted, Mr. Kusher said it’s also relevant to understand the context in terms of how much that equates to in dollar terms. Based the median dwelling value at the time of the market peak, a -7.4% fall in national dwelling values convert approximately into a $40,590 decline in dwelling values.
Whilst looking at falls across the combined capital cities, the decline has been larger than national falls with values -9.2% smaller than their September 2017 peak. This converts to an approximate $59,478 reduction in dwelling values. During the combined regional markets, values have been fallen by -2.5% or $9,464 from their May 2018 peak.
Let’s look across the states.
Sydney’s values are -13.9% lower than their peak or down $124,739. In regional NSW, values have gone down by -4.1% or -$18,674.
Melbourne’s dwelling values have fallen by -10.3% or $71,404 from their peak. Regional Vic values are $2,749 less than their peak having fallen by -0.8%.
Brisbane’s dwelling values are $7,796 or -1.6% less than they were at their peak. In regional Qld, values are -4.9% less than their peak which is $18,773 less.
Adelaide’s dwelling values are -0.5% or -$2,307 less than their peak. Regional SA values are -3.4% or -$8,623 less than their peak.
Perth’s dwelling values have peaked in mid-2014 and are currently at -18.1% or -$97,797 less. Regional WA values haven dropped to -31.6% from their peak taking them $118,743 less.
Hobart and regional Tas are the only 2 main regions of the country in which their values are yet to have fallen from their peak.
Darwin’s dwelling values are -27.5% or -$145,980 less than their peak. In regional NT the falls have remained moderate at -7.9% or -$31,761.
Values are -0.2% less than their peak or -$1,071.
While a proportion fall in values provides you an inspiration of the market is fairing, seeing the actual value of the declines could be stark reminders of the actual losses. Whereas the recent declines in markets like Sydney and Melbourne may be placed in context of the significant increases over recent years, this is little comfort for home owners that purchased at or near to the peak of the market.
Over the approaching months, declines are expected to continue, resulting in additional falls in asset values. Importantly, while values are falling, the debt held against these properties is unlikely to be reducing at identical pace leading to wealth declines for holders of residential property.
From another aspect, lower housing values are enhancing for it to be more attractive to first home buyers and prospective buyers who were previously priced out of the housing market. With publicized stock levels remaining high and mortgage rates tracking around the lowest level since the 1960’s (and likely moving even lower this year), active buyers are back in the driver’s seat to take advantage of improved housing affordability and the low cost of debt.