Some regions still climbing as Australian house prices fall
Australia’s housing market recorded its steepest quarterly fall, while regional prices continued to rise in Victoria, the Northern Territory and South…
Australia’s housing market has recorded its steepest quarterly fall, while some regions still climbing have yet to follow the decline in the capital cities. Regional prices rose in Victoria, the Northern Territory and South Australia, according to the latest Domain property report.
The national market fell 4.7 per cent in the quarter, and median house prices declined in every capital city for the first time in 15 years. The contrast leaves regional South Australia rising on reported prices even as buyer enquiries there have dropped sharply.
Outside Adelaide, house prices rose 19 per cent over the past 12 months, reaching a median of $595,000, Domain reported. But that data runs only to September 30, and it captures a market before recent signs of weaker activity reported by a local agent.
Regional South Australia’s rise meets a slowdown
Earlier this year, Helen Burns sold her “little cottage” in the Adelaide Hills for about $800,000 and moved 350 kilometres south-east to Penola, in South Australia’s South East. Family considerations prompted the move, and the price difference helped make it attractive.
“[I] pretty much tripled the land size and doubled the house size for only $20,000 [more],” Burns said.
The comparison reflects why regional prices have risen. A report from Proptrack earlier this year said regional South Australian house prices had almost doubled over the past five years. Margot Shortt, a real estate agent in Naracoorte, described the past year as “nothing short of crazy”, saying some buyers entered the market expecting prices to keep rising.
That pace may be fading. Shortt said calls and messages to her agency had “absolutely fallen off a cliff”, citing the interest-rate increase and broader economic factors. The Reserve Bank of Australia lifted interest rates to a 15-year high two days before the September 30 cutoff for Domain’s report.
“We have seen probably a 99 per cent decline in enquiries,” Shortt said.
Fewer enquiries do not yet establish whether prices in the area have turned down. Shortt said the lack of recent sales made it difficult to compare market conditions.
“Is the market terrible? We haven't really seen too many transactions transpire so we can't compare,” she said.
Economist expects regional markets to turn later
Chris Leishman, a housing economist at Adelaide University, said Sydney and Melbourne generally register shifts first, while Adelaide tends to respond more slowly. Regional areas can continue to perform strongly later in a housing cycle, he said, making regional South Australia a likely late holdout as other markets level off or decline.
The distinction matters for sellers and buyers: published prices can keep rising even as activity weakens, particularly when there are too few recent transactions to show a clear direction. In regional South Australia, the latest figures point upward, while the steep fall in enquiries suggests the market is becoming harder to read.
Leishman said Australia was nearing the end of a long, pronounced housing boom and did not expect strong growth across the country over the next couple of years. He said a correction was due, though he did not expect the market to crash.
He expected prices to fall further for six to 12 months before rising again over the long term.
Source: abc.net.au
