Australian home values fell for a seventh consecutive month in October as weak sales and expectations of another interest-rate increase added pressure to the property market, Cotality data and Reuters reporting showed.
Cotality reported that national values dropped 1.2% from September, when they fell by a revised 1.3%. Prices were 6.7% below their peak and 2.8% lower than a year earlier. Capital-city values declined 8.1% over seven months, the sharpest fall over that span in 40 years, the firm said. The drop exceeded the 7% decline over a comparable period in 2022-23, when the central bank raised rates to curb inflation after the COVID-19 pandemic.
Brisbane values fell 2% in October, Perth prices dropped 1.7% and Sydney values declined 1.6%. Sydney home values were 1.5% below their level five years earlier. Reuters reported that Australian property sales were 23% lower than a year earlier and 18% below the five-year average. Sydney transactions fell 30% over the same period.
Tim Lawless, Cotality's research director, said the number of listings had grown, but buyer activity remained subdued. He cited weak confidence and difficulty managing loan payments as barriers to demand.
Markets priced in nearly a 90% chance that the Reserve Bank of Australia (RBA) would raise its rate to 4.85% on Tuesday, Nov. 3, Reuters reported. That would be the fifth increase and the highest rate in 18 years. Markets also implied a 20% chance rates could reach 5.1%.
Reuters reported that policymakers have identified housing weakness as a risk to the economy. The RBA has said most Australian mortgage holders would still have positive equity if home prices fell 20%.
The October figures extend the downturn covered in EconoTimes' report on a record quarterly fall in capital-city home values. The RBA is expected to announce its next rate decision Tuesday, Nov. 3.
