Home prices ended the first month of 2023 with a slower decline compared to the latter months of 2022, according to the latest PropTrack Home Price Index.
According to PropTrack, home prices recorded a small decline of 0.09% in January, extending the decline from the peak in March 2022 to 4.51%.
All capital cities posted a decline over the month except Perth, where there was no movement in prices.
Brisbane, Sydney, and Hobart home prices have fallen at the fastest in more than a decade since their respective peaks.
Meanwhile, home prices in Canberra have recorded both the fastest and deepest decline in over ten years.
Across regional markets, home prices in Western Australia fell the fastest during the month, slipping 0.27%.
On the other hand, regional South Australia continues to defy the downturn, with prices rising 0.46% to a new peak.
Overall, regional prices held a better standing than capital city prices, reporting a 0.03% monthly and 0.32% annual declines versus the latter’s 0.11% monthly and 4.68% annual fall.
PropTrack senior economist Eleanor Creagh said home prices across Australia are still 28.5% above their pre-pandemic levels, despite the recent price decline.
“The worst of the downturn appears to have passed — the rapid pace of price falls seen in June and July 2022 when interest rates first started rising has subsided and price falls have eased in most capital cities in recent months,” she said.
Still, it is worth noting that national home prices clocked its 10th month of decline in January, on the back of the 300bps increase in cash rate that began in May.
Ms Creagh said a further 25bps increase in cash rate this month, which would take the cash rate to 3.35%, will continue to impact home prices.
“The continued reduction in borrowing capacities will weigh on prices in the period ahead, though the declines will likely continue at this slower pace as interest rates approach their peak,” she said.
“Home prices may begin to stabilise as interest rate uncertainty reduces later in the year.”
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