Aussie home prices have fallen for the fourth month in a row, with the national market feeling the sting of interest rate hikes and huge federal budget changes.
The latest PropTrack Home Price Index found Australia’s median dwelling price dropped 0.3 per cent in July, now at a median of $989,000.
Capital cities took the biggest hit, with only Darwin managing to increase home values over the month.
MORE: Named: Booming Aus suburbs defying ‘gloom’
Darwin was the only capital city to increase their median home price in July, rising 0.1 per cent while the rest of Australia dipped 0.3 per cent. Picture: Tourism NT/Shaana McNaught
MORE:‘No longer’: Big Aus bank’s huge RBA call
PropTrack senior economist Anne Flaherty said prices had been consistently declining due to a domino effect of interest rate hikes, the new federal budget and reduced competition.
“The budget changes have been a factor,” she said. “It is pretty reasonable to assume we’ve seen an overall decrease in buyer demand from a decrease in investor demand.”
The monthly price falls since March have put a major dent in the nation’s housing wealth, with PropTrack analysis showing the overall value of Australian residential real estate has fallen from $12.77 trillion to $12.54 trillion- a loss of $230 billion.
The new federal budget put a dampener on Australia’s investor market, with changes to come next year that restrict negative gearing to new properties and limit Capital Gains Tax benefits.
Meanwhile, the nation’s interest rate rose three times earlier this year, with a cash rate of 4.35 per cent putting pressure on buyers and mortgage owners.
MORE: Tax blow-up fuels record Aus landlord exodus
![](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1024 768"%3E%3C/svg%3E)
PropTrack senior economist Anne Flaherty said the country was slowly becoming more of a buyer’s market thanks to fears over interest rate hikes and changes to the federal budget.
MORE: Aus AI boom putting your home at risk
Ms Flaherty said many home hunters were waiting to see if prices would continue to fall, hoping to get into the market at the best time before it bounced back.
“I do think it’s going to continue to become even more of a buyers market,” she said. “We’re predicting prices have further to fall before the end of the year.”
“Buyers who are first-home buyers or upsizers, they probably have a greater incentive to hold out until prices reach the floor.
“I think the rush to get into the market that we see when prices are rising rapidly isn’t there at the moment … so I think buyers are in a better position to bargain.”
MORE: Man pulls out 20m ‘monster’ in Aus backyard
Home values fell for the fourth month in a row at the end of July, with unit prices hurt less by the impact. Picture: iStock
Units were the best-performing dwelling type over July, only down 0.2 per cent compared to a 0.4 per cent fall for houses.
Long-term price growth remains strong for the country amid the current housing crisis, with a 3.9 per cent annual growth since last year and a 31.2 per cent five year growth.
However, Australia’s median dwelling price is now 1.8 per cent lower than its peak earlier in the year, with June also seeing values fall 0.3 per cent.
![Panoramic aerial drone view of Northern Melbourne Suburbs with Houses roads and parks in Melbourne Victoria Australia](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 1280 720"%3E%3C/svg%3E)
While regional markets remained stagnant, capital cities dipped 0.4 per cent, with all but Darwin falling between 0.2 and 0.6 per cent. Picture: iStock
Darwin was the best performer in July with a 0.1 per cent rise, continuing to be the only capital with rising home prices for the second month in a row.
Meanwhile, Perth’s growth fell 0.2 per cent, followed by Brisbane at 0.3 per cent, Melbourne by 0.4 per cent that month and Adelaide and Hobart by 0.5 per cent.
Sydney was the worst performer of the month, where prices fell 0.6 per cent to $1,563,000 – still remaining the highest median dwelling price in the country by far.
“Sydney is the most expensive market in the country, and that makes it the most sensitive to a high interest rate environment,” Ms Flaherty said.
Sydney was hit the hardest by falling prices, with Ms Flaherty saying the most expensive city in the country was more sensitive to changing borrowing capacity.
“When interest rates increase and borrowing capacity is impacted, that can have a higher impact on prices.”
While capital cities fell 0.4 per cent to a median of $992,000, regional markets held firm with no change in the median house price.
Ms Flaherty said while regional markets were still being affected by budget and interest rate factors, their recent high performance had prevented prices from falling as far.
“Even though it’s slowed growth, it’s slowed from a higher base,” she said. “I think regional markets that do see higher levels of investor participation are at higher risk.”
