The nascent house price correction underway across Sydney and Melbourne is gathering pace according to the latest data from CoreLogic.
CoreLogic’s daily dwelling values index, which captures price changes across the five major capitals, fell by 0.15% in the week ended 26 May – the third consecutive week of decline:
The decline at the 5-city level was once again driven by Sydney and Melbourne, where values fell 0.36% and 0.17% respectively. The decline across these two major markets more than offset value gains elsewhere:
So far in May, Sydney and Melbourne dwelling values have fallen by 0.82% and 0.51% respectively. This more than offset price growth across the other major capitals, with values at the 5-city level down 0.26%:
Over the quarter, values across Sydney and Melbourne have fallen 1.3% and 0.6% respectively, but were more than offset by value gains elsewhere. Accordingly, values are 0.4% higher over the quarter at the 5-city level:
Finally, Sydney and Melbourne dwelling values are down 0.7% and 0.4% respectively over 2022. However, these falls have been more than offset by strong growth across the other major markets, which has driven values 1.5% higher at the 5-city level:
Given Sydney and Melbourne has Australia’s most expensive housing and most indebted households, it stands to reason that these two markets will also be most sensitive to interest rate rises.
Therefore, both markets should experience the largest housing downturns, and lead the nation’s housing correction, as the Reserve Bank tightens monetary policy.