Australia's housing downturn is on track to become the deepest in 40 years as economists warn already sizeable price drops could be only one-third of the way through.
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drops → become → way
National property values fell 1.1 per cent in September, taking the total decline since the March peak to 5.2 per cent, data firm Cotality revealed on Thursday.
The median dwelling value dropped to $899,236 - essentially back to where it was 12 months earlier.
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it → fall → 899,236
Brisbane overtook Sydney as the city with the steepest monthly fall, down 1.5 per cent compared to Sydney's 1.4 per cent.
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Brisbane → overtake → cent
The downturn was deeper than at the same stage of the 2022/23 price drop, Cotality research director Tim Lawless said.
'This is just a little bit more rapid than what we're seeing through that previous period of decline, which was one of the largest corrections on record,' he told AAP.
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he → say → AAP
I think this one's quite sharp, clearly, but I'm not sure how short it's going to be.'
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it → think → ?
Australia's housing downturn is on track to become the deepest in 40 years as economists warn already sizeable price drops could be only one-third of the way through
Some economists, such as HSBC's Paul Bloxham, have forecast prices to decline 13 per cent, from peak to tough.
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prices → become → tough
AMP chief economist Shane Oliver said the slump could be as large a 15 per cent and run until the middle of 2027.
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slump → say → 2027
While rising interest rates are having a larger influence on prices, Labor's tax changes for property investors are clearly having an impact.
'
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changes → rise → impact
Once the dust finally settles, maybe around the middle of next year, then fresh home buyers will probably be in a situation where housing is more affordable and there's less competition with investors,' Mr Lawless said.
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Lawless → settle → investors
So on that framework... I think the budget would have done what it set out to achieve.'
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it → think → what
Treasurer Jim Chalmers said prices were already coming off before the May budget, but the changes would help ensure there were more affordable opportunities in the market for first-home buyers.
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changes → say → buyers
'Young people and first-home buyers have been locked out of the housing market for decades, since the mistake was made with the tax changes a quarter of a century ago,' he told reporters on Thursday.
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he → lock → Thursday
As interest rates climb, the property downturn is widening as well as deepening.
Over the three months to the end of September, 97 per cent of capital city suburbs were down in value, Cotality said
Over the three months to the end of September, 97 per cent of capital city suburbs were down in value, Cotality said.
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Cotality → climb → value
While the lower quartile of the market was holding up in the early stages of the downturn, pockets of resistance were increasingly disappearing.
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pockets → hold → resistance
But Labor's expansion of its five per cent deposit scheme was still buttressing demand among first-home buyers at the lower end of the market.
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expansion → buttress → market
Since it was uncapped one year ago to the day, more than 102,000 first-home buyers had made use of the scheme, Prime Minister Anthony Albanese said.
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Albanese → make → scheme
'This scheme is helping Australians, particularly young Australians, get their foot in the door and achieve the dream of home ownership,' he said.
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he → help → ownership
The tax changes were predicted to push rents up due to a reduction in rental stock.
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changes → predict → stock
However, inflation data released by the Australian Bureau of Statistics on Wednesday showed rents have stabilised, rising 3.6 per cent in the 12 months to August - a rate of growth that has been unchanged since May.
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that → release → May
A rebound in the rental vacancy rate from a record low 1.5 per cent to two per cent - due to larger household sizes and lower migration levels - was helping take some heat out of the market, Mr Lawless said.
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Lawless → help → market
The Aporia
