Australia’s housing prices mark largest annual decline of 5.3% since 2008

Canberra, Jan 3 (IANS) Australia’s housing markets finished the 2022 calendar year on a weaker note, as a national home value index showed a 1.1 per cent fall in December, taking the annual drop to 5.3 per cent — the largest since 2008.

In a report, the multinational property information provider CoreLogic revealed that the 5.3-per cent drop through 2022 marks the largest calendar year decline since 2008, when values were down 6.4 per cent amid the global financial crisis and successive interest rate rises, reports Xinhua news agency.

Annual value falls were the most significant in Sydney, which slid 12.1 per cent, followed by a 8.1 per cent drop in Melbourne.

Hobart, the Australian Capital Territory, and Brisbane also recorded an annual decrease.

Meanwhile, three capital cities — Adelaide, Darwin and Perth — saw values rise over the year, marking 10.1 per cent, 4.3 per cent and 3.6 per cent, respectively.

According to the report, despite the downturn across many areas of the country, housing values generally remain 11.7 per cent above where they were at the onset of the Covid-19 pandemic.

Tim Lawless, CoreLogic’s research director, pointed out that 2022 has been a year of contrasts, with housing values mostly rising through the first four months of the year, but falling sharply as the Reserve Bank of Australia (RBA) commenced the fastest rate-tightening cycle on record.

“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen 8.2 per cent, following a dramatic 28.9 per cent rise in values through the upswing,” he added.

After lowering the cash rate target to 0.1 per cent in a bid to boost economic recovery, Australia’s central bank has launched a spate of consecutive rate hikes since May last year, pushing the rate to a decade-high of 3.1 per cent.

Australia’s Consumer Price Index is currently running at 7.3 per cent, with the RBA expecting further rate increases to return inflation back to the 2-3 per cent range.