Brisbane’s house price correction continues to break records.
According to the CoreLogic daily dwelling values index, Brisbane housing values are declining at a 4.1% quarterly pace. That’s the fastest rate of decline in records dating back to 1980:
Brisbane house prices falling at record pace.
Brisbane dwelling values have now plunged 4.2% from their mid-June peak, with no signs of slowing down:
Prices in freefall since mid-June.
The next chart tracks Brisbane’s current price correction (shown in black) against prior episodes, using the CoreLogic monthly hedonic index:
Fastest housing correction on record.
Although Brisbane’s current correction (-4.2% after three months) is well short of the 2010-12 correction (-10.8% over 21 months) or the 2008-09 episode (-8.6% over 10 months), the current pace of decline is easily the quickest on record at this stage of the downturn (i.e. three months in).
Out of all Australian capitals, Brisbane experienced the biggest (44%) increase in dwelling values over the pandemic (i.e. between March 2020 and June 2022).
Rapid price booms are usually followed by solid corrections, and Brisbane’s pandemic boom was extraordinary. Therefore, the city’s dwelling values should adjust back toward ‘fair value’ in response to the Reserve Bank of Australia’s (RBA) aggressive monetary tightening.
The bottom won’t arrive until after the RBA stops hiking rates, whenever that is.
Given this month’s RBA monetary policy statement explicitly noted that “the Board expects to increase interest rates further over the months ahead”, it stands to reason that Brisbane dwelling values have a long way to go before they bottom.
Brisbane’s current housing correction should, therefore, end up easily exceeding the 2010-12 episode.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also Chief Economist and co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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