Named: Booming Aus suburbs defying \u2018gloom\u2019<\/a><\/p>\nSydney continues to lead the pace of declines, with home values down 1.4 per cent in August to be 7.1 per cent below peak levels recorded in February. <\/p>\n
The rate of decline in Sydney home values is now outpacing the earlier 2022-23 correction, when home values were down 6.6 per cent over the equivalent period following the market peak.<\/p>\n
\u201cSydney continues to lead the downturn,\u201d Mr Lawless said. <\/p>\n
\u201cThe combination of a sharp drop in demand and higher than average advertised stock levels is weighing more heavily on Australia\u2019s largest housing market.\u201d<\/p>\n
Melbourne, Canberra (both -1.1 per cent) and Brisbane (-1.0 per cent) are the only other capitals to record a decline of 1 per cent or more in home values over the month. Still, the other mid-sized capitals aren\u2019t far behind, with Adelaide and Perth home values dropping 0.8 per cent in August.<\/p>\n
Most capitals are still seeing the more expensive end of the market record weaker conditions than lower-priced housing; however, the performance gap has narrowed as the downturn has become more broadbased. <\/p>\n
Higher-value housing continues to record larger declines amid elevated borrowing costs and serviceability constraints, while lower quartile values are now also falling as affordability pressures and weaker demand become more widespread.<\/p>\n
\u201cThe narrowing performance gap between the upper and lower quartiles is another sign this downturn is broadening,\u201d Mr Lawless said. <\/p>\n
\u201cPremium markets are still generally recording weaker conditions, but lower-priced housing is becoming less insulated as affordability pressures and softer demand weigh more evenly across the market.\u201d<\/p>\n
\u2018Further price falls are likely\u2019<\/p>\n
REA also released a report this morning showing national home prices fell for the fifth consecutive month in August.<\/p>\n
The report found that home prices nationally slipped 0.2 per cent, as nearly every capital recorded price falls \u2013 though compared to August 2025, home prices are up 1.8 per cent.<\/p>\n
It showed home prices across the capital cities were down 0.3 per cent in August, with declines across every city, bar Darwin (+0.1 per cent). Adelaide led the falls in August, down 0.9 per cent, followed by a 0.4 per cent fall in Canberra, and a 0.3 per cent decline in both Sydney and Brisbane. <\/p>\n
Senior economist and report author Eleanor Creagh said the falls came as higher interest rates continue to constrain borrowing capacities and weigh on housing demand. <\/p>\n
\u201cWhile the pace of national price falls eased slightly in August, prices continued to decline across most capital cities,\u201d she said. <\/p>\n
\u201cMomentum has slowed in markets that have been among the strongest performers over the past year, with Adelaide recording the largest fall in August. <\/p>\n
At the same time, the divergence between capital city and regional markets has widened. <\/p>\n
\u201cAs affordability pressures are pushing demand toward cheaper markets and dwelling types, both regional and unit markets are proving considerably more resilient,\u201d she said. <\/p>\n
\u201cFurther price falls are likely to be seen over the coming months, particularly across the capital cities. Uncertainty around tax changes, the outlook for interest rates, and ongoing price falls, continue to weigh on confidence, keeping some buyers on the sidelines.\u201d<\/p>\n
Quiet spring expected, big opportunities for one cohort of Aussies <\/p>\n
Independent property economist Cameron Kusher warned the market faces a subdued spring selling season as vendor confidence cools and borrowing constraints tighten.<\/p>\n
\u201cThe amount of stock on the market is still really high, but it looks like people are deciding not to bring more stock to the market,\u201d Mr Kusher told news.com.au.<\/p>\n
\u201cUsually, you see a bit of a ramp-up in new listings from mid-August onwards, but that doesn\u2019t really seem to be happening. Only people who really need to sell are putting their properties on the market at this stage.\u201d<\/p>\n
While the lack of frantic listing activity suggests widespread market distress is limited, looming Reserve Bank rate decisions threaten to drag buyer demand down further.<\/p>\n
\u201cThe rate of decline is accelerating and broadening, and that\u2019s likely to continue over the coming months because we\u2019re not seeing a lot of interest from buyers,\u201d Mr Kusher said.<\/p>\n
\u201cIt\u2019s looking more likely that the RBA will have to increase interest rates. The next interest rate hike gets us back to levels we haven\u2019t seen for 15 years, and that will be a shock to the system for a lot of borrowers.\u201d<\/p>\n
Despite the challenging environment, Mr Kusher highlighted that shifting market dynamics are creating distinct entry points for specific buyer groups, particularly upgraders and first-home buyers.<\/p>\n
\u201cEven though prices are falling, there are still opportunities,\u201d he said. <\/p>\n
\u201cIf you\u2019re looking to upgrade, your property is going to sell for less, but the property you\u2019re buying is likely to have seen a bigger discount.<\/p>\n
\u201cWith fewer investors in the market, there are clearly opportunities for first-home buyers to enter. The advice to them would be: don\u2019t try to pick the bottom of the market, that\u2019s very hard to do, but there are opportunities to buy properties at a significant discount compared to six months ago.\u201d<\/p>\n
Regional prices also slipping<\/p>\n
As major city suburbs see prices fall, the regions are copping it too.<\/p>\n
Cotality data shows the combined regional index was down 0.4 per cent in August, taking regional values 1.2 per cent lower through winter. <\/p>\n
Regional South Australia was the only broad rest-of-state market to avoid a decline in values over the past three months, highlighting a deteriorating trend across regional Australia.<\/p>\n
This weaker phase of the housing downturn has been largely driven by declining demand, with Cotality\u2019s quarterly estimate of home sales tracking 15.5 per cent lower than at the same time last year and 11.5 per cent below the five-year average. <\/p>\n
Brisbane, Perth and Sydney have recorded the largest declines in transaction activity, with estimated sales volumes down more than 20 per cent compared with a year ago.<\/p>\n
\u201cThe softer trend in values is underpinned by weaker transaction activity,\u201d Mr Lawless said. \u201cSales volumes are tracking well below both year-ago levels and the five-year average, which points to a clear reduction in buyer demand.\u201d<\/p>\n
As demand has weakened, homes are taking longer to sell and listings have accumulated. Across most capital cities, advertised supply is now tracking well above both year-ago and five-year average levels. Over the four weeks ending August 30, capital city listings were 24 per cent higher than a year ago and 8 per cent above the five-year average. <\/p>\n
This rise in listings comes despite fewer new listings, with the flow of freshly advertised homes added to the market tracking 6 per cent lower than a year ago and 8 per cent below the five-year average.<\/p>\n
\u201cHigher advertised stock levels are simply a factor of a slower rate of absorption,\u201d Mr Lawless said. <\/p>\n
\u201cLonger selling times, larger vendor discounting and persistently low auction clearance rates all point to a buyer\u2019s market, yet buyers are lacking the confidence to transact at the moment.\u201d<\/p>\n
Auction clearance rate falls<\/p>\n
In perhaps more bad news for sellers, auction clearance rates eased last week \u2014 coming in at 52.4 per cent for the combined capital cities. <\/p>\n
In Sydney last week, 683 properties were scheduled to be auctioned in Sydney. A total of 233 properties were sold via auction last week, according to REA data.<\/p>\n
Nationally, Cotality\u2019s data shows last week\u2019s clearance rate was lower than the previous week\u2019s 53.2 per cent. <\/p>\n
The softer result followed a brief improvement through mid-August, when preliminary clearance rates rose above the 55 per cent mark over the weeks ending August 9 and August 16.<\/p>\n
The lower preliminary clearance rate occurred alongside increased auction activity last week. A total of 1482 capital city homes went to auction, up 6.6 per cent from the previous week. Auction volumes are expected to continue rising as the weather improves, with approximately 1500 homes scheduled for the first week of spring and over 1600 the following week. This seasonal increase will test buyer demand, though activity is unlikely to match last year\u2019s levels.<\/p>\n
Auction volumes remain well below last year\u2019s levels, down 32.3 per cent compared to the same week last year. This softer trend defined much of this winter\u2019s auction market, with capital city volumes ending the season about 18 per cent lower than winter 2022. <\/p>\n
The annual decline was concentrated in the largest markets, with winter volumes down approximately 25 per cent in Sydney, 19 per cent in Melbourne and 14 per cent in the ACT. In contrast, Perth, Adelaide and Brisbane saw increases of 20 per cent, 6.9 per cent and 0.4 per cent respectively.<\/p>\n
In Melbourne, 653 homes went under the hammer, the highest of any capital city last week, up 9.9 per cent from the week prior, though almost 40 per cent fewer than a year ago. The preliminary clearance rate eased for a third week in a row to 54.9 per cent, down from 55.4 per cent the previous week, and that was below the recent peak of 60.8 per cent recorded over the week ending August 9.<\/p>\n
Sydney\u2019s preliminary clearance rate has remained above 55 per cent for four consecutive weeks, easing slightly to 56.3 per cent from 56.6 per cent. The city held 516 auctions, the second-highest among the capitals, up 8.2 per cent from the previous week but 36.3 per cent lower than a year ago.<\/p>\n
Among the smaller capital cities, Brisbane again had the most volume, with 149 homes taken to auction, 1.3 per cent down on the previous week and 21.1 per cent up on the same week last year. The preliminary clearance rate fell to 31.5 per cent, down 8.9 percentage points from 40.4 per cent the previous week and the lowest early result since the first week of July.<\/p>\n
Adelaide\u2019s preliminary clearance rate was 50.8 per cent, a decrease of 4.1 percentage points from the previous week. Auction volumes in the city increased by 16.7 per cent from the previous week to 105, which is 1.9 per cent higher than a year ago.<\/p>\n
The smaller markets held few auctions \u2013 in the ACT, 48 auctions took place, down by 27 per cent from the previous week and 24 per cent from a year ago, though its preliminary clearance rate edged up 30 basis points to 41.7 per cent. Perth held nine auctions and only two auctions took place in Tasmania.<\/p>\n
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