Australian house prices have recorded their sharpest quarterly fall on record, with every capital city declining at the same time for the first time in 15 years as higher interest rates and weaker buyer confidence deepen the property downturn.
Domain data show national capital city house prices fell 4.7% during the September quarter, taking the combined median to around A$1.23 million.
Perth recorded the largest decline at 7.4%, while Sydney house prices fell 4.7% and Melbourne dropped 3.3%.
Unit prices also weakened, falling 3.5% across the combined capitals and marking a second consecutive quarter in which both houses and units declined.
Buyers gain negotiating power
The downturn is increasingly being driven by weaker demand rather than a surge in listings.
Higher borrowing costs have reduced purchasing capacity, while falling prices have removed some of the urgency that previously encouraged buyers to enter the market quickly.
Homes are taking longer to sell, auction volumes have fallen sharply and buyers have greater scope to negotiate.
The weakness is most pronounced at the expensive end of the market.
In Sydney, values in the highest-priced quartile have fallen more than twice as much as those at the bottom of the market, reflecting the greater sensitivity of expensive properties to borrowing costs.
The latest figures reinforce expectations that Australia’s housing correction has further to run while the Reserve Bank keeps monetary policy restrictive.
With the cash rate at 4.60% and another increase now being discussed, buyers are increasingly waiting for clearer evidence that interest rates have peaked before returning to the market.
