National home prices have slipped by 0.21% over December, placing values 2.29% lower compared to 12 months ago, according to the PropTrack Home Price Index.
“At a national level, property prices have seen nine consecutive months of price declines, now sitting 4.25% below their peak,” said Anne Flaherty, PropTrack economist and report author.
Despite recent falls, prices nationally remained 29% above their pre-pandemic levels.
All capitals, except for Darwin and Hobart, recorded a drop, with Canberra (-0.43%) and Melbourne (-0.34%) posting the largest monthly declines. Adelaide (-0.18%), meanwhile, saw its first monthly price drop post-pandemic.
In capital cities, prices fell 3.99% compared to their level a year ago, while regionally they rose 2.08%.
“Performance has been mixed across markets, however the largest falls were recorded in the more expensive capital cities of Sydney, Melbourne, and Canberra, while more affordable markets have displayed greater resilience,” Flaherty said, adding that rising interest rates were the primary driver of price declines in 2022.
The Reserve Bank lifted interest rates for the eighth consecutive month in December, with the rate rises slashing the average buyer’s borrowing power by around 25% in total.
“While interest rates are likely to be approaching their peak, the Reserve Bank has signalled the potential for more increases in 2023,” Flaherty said. “Higher interest rates would further erode borrowing capacities and drive prices lower.”
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