Property prices in capital cities have fallen

Property prices in capital cities have fallen, but in Australia’s capital cities, the largest falls have been at the top end of the market, out of reach for first home buyers.

National property values down 5.2%

W ith national property values down by 5.2% in September from their March peak, Australia’s housing market is in a distinct downturn.

Opposition leader warns of freefall

This has sparked concerns voiced by the opposition leader, Angus Taylor, of a housing market " in freefall ".

“in freefall”

Price drop equivalent to one year ago

Translated into dollar terms, using the Domain property price series, the price of a typical home has dropped to about what it would have fetched one year ago.

Market downturn predated tax reforms

The current market down cycle was already well established in most parts of Australia before that, following the first official interest rate rise in February.

Treasury estimates 2% price dampening

Experts at Treasury estimated the tighter rules on negative gearing and capital gains tax unveiled in the budget would dampen prices only about 2% over "a couple of years".

“a couple of years”

Interest rates key driver of price drop

Much of the long-term run-up in house prices was fuelled by generally declining interest rates over three decades to 2020; each rate cut boosted buyers’ borrowing capacity.

RBA raises rates for fourth time

The Reserve Bank of Australia raised rates last week for the fourth time this year, and financial markets expect at least one more rate rise in November or in 2027.

Cotality predicts 10-15% price fall

Cotality’s research director, Tim Lawless, believes an overall reduction of 10% to 15% is "a fairly reasonable estimate".

“a fairly reasonable estimate”