Australia’s housing markets finished the 2022 calendar year on a weaker note, as a national home value index showed a 1.1 percent fall in December, taking the annual drop to 5.3 percent.
In a report released on Monday, the multinational property information provider CoreLogic revealed that the 5.3-percent drop through 2022 marks the largest calendar year decline since 2008, when values were down 6.4 percent amid the global financial crisis and successive interest rate rises.
Annual value falls were the most significant in Sydney, which slid 12.1 percent, followed by a 8.1 percent drop in Melbourne. Hobart, the Australian Capital Territory, and Brisbane also recorded an annual decrease.
Meanwhile, three capital cities – Adelaide, Darwin and Perth – saw values rise over the year, marking 10.1 percent, 4.3 percent and 3.6 percent, respectively.
According to the report, despite the downturn across many areas of the country, housing values generally remain 11.7 percent above where they were at the onset of the COVID-19 pandemic.
Tim Lawless, CoreLogic’s research director, pointed out that 2022 has been a year of contrasts, with housing values mostly rising through the first four months of the year, but falling sharply as the Reserve Bank of Australia (RBA) commenced the fastest rate-tightening cycle on record.
“Our daily index series saw national home values peak on May 7, shortly after the cash rate moved off emergency lows. Since then, CoreLogic’s national index has fallen 8.2 percent, following a dramatic 28.9 percent rise in values through the upswing,” he added.
After lowering the cash rate target to 0.1 percent in a bid to boost economic recovery, Australia’s central bank has launched a spate of consecutive rate hikes since May last year, pushing the rate to a decade-high of 3.1 percent.
Australia’s Consumer Price Index is currently running at 7.3 percent, with the RBA expecting further rate increases to return inflation back to the 2-3 percent range.
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