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  • Low-listings December caps off a quiet selling season

Low-listings December caps off a quiet selling season

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Low-listings December caps off a quiet selling season

December was another muted month for Australian property, with prices dipping another -1.1 per cent according to CoreLogic's latest report

Listings remained far below average levels, suggesting there could be significant pent-up activity as both buyers and sellers wait to see where interest rates settle. 

While 2022 represented a turbulent year for our housing markets, prices remain well above pre-Covid levels in the vast majority of areas. So where will they go in 2023?

National property prices: December 2022

Houses $761,607 Monthly change: -1.2%

Units $591,480 Monthly change: -0.8%

Price activity in December more or less mirrored November's results, with an overall -1.1 per cent drop in Australian home values to close out 2022 according to CoreLogic. 

Once again, performance varied significantly between the capital city markets.

MarketMonthQuarterAnnualMedian value
Combined capitals-1.2%-3.3%-6.9%$770,374
Combined regional-1.0%-3.2%0.1%$577,616

Sydney's decline picked up a touch, edging up from a -1.2 per cent fall in November to -1.4 per cent in December. Melbourne also saw the rate of decline increase from -0.8 per cent to -1.2 per cent. 

Things eased off in Brisbane, meanwhile. Prices fell -1.5 per cent in December compared to -2.0 per cent declines in the previous two months. 

Adelaide again held relatively steady with a -0.4 per cent dip, and Perth continued its flat trajectory by notching up +0.1 per cent. 

The downturn in Hobart and Canberra remained fairly consistent, dropping -1.9 per cent and -1.2 per cent respectively for the month, while Darwin edged back into the negative with a -0.5 per cent change. 

The combined regional markets outperformed capital cities with a gentler -1.0 per cent decline, bringing regional home values back to December 2021 levels. 

CoreLogic's research director Tim Lawless explained that 2022 was a turbulent year, with early growth suddenly reversed by the RBA's aggressive interest rate hikes. 

"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 per cent, following a dramatic +28.9 per cent rise in values through the upswing," he said.

Prices remain comfortably above pre-pandemic levels

On a national level, the median home value dropped by -5.3 per cent in 2022. 

While that represents a significant decline, it's a relatively small number when put into the context of how Australia's housing market has grown throughout the pandemic.

RegionCovid through-to-peak growthDecline from recent peakMonth of recent peak
Sydney27.7%-12.7%Jan 22
Melbourne17.3%-8.3%Feb 22
Brisbane42.7%-9.4%Jun 22
Adelaide44.7%-1.3%Jul 22
Perth25.9%-0.6%Jul 22
Hobart37.7%-9.3%May 22
Darwin31.1%-1.2%Aug 22
ACT38.3%-7.6%Jun 22
Regional NSW47.6%-8.8%May 22
Regional VIC35.0%-6.0%May 22
Regional QLD42.7%-6.3%Jun 22
Regional SA46.2%at peakDec 22
Regional WA31.5%at peakDec 22
Regional TAS51.0%-5.1%Jun 22
Combined capitals25.5%-8.6%Apr 22
Combined regions41.6%-6.6%Jun 22
Australia28.6%-8.0%Apr 22

As the above table shows, the gains amassed from the pandemic low point to the market peak were some of the largest ever recorded in Australia's property market. 

CoreLogic's report pointed out that, "across the combined capital cities, dwelling values remained +11.7 per cent above where they were at the onset of COVID (March 2020), while values across the combined regional markets are still up +32.2 per cent."

Even Sydney, which has experienced the largest downturn as a result of interest rate hikes, would still have a substantial way to fall before returning to prices seen prior to the pandemic.

New listings plummeted in December as sellers held off

For the most part, 2022 was defined by persistently low levels of stock on the market, and that trend continued in December. 

In the four weeks to Christmas, new capital city listings were down -30.6 per cent on the same period in 2021, almost -10 per cent lower than the five-year average.

The 2022 spring selling season never quite took off as it typically would. Source: CoreLogic

Total stock on the market was down -7.8 per cent year-on-year and fell -19 per cent below the five-year average, indicating the ongoing shortage of available listings. 

"The trend in housing inventory showed a conspicuous lack of seasonality through spring and the first month of summer, with advertised supply holding reasonably firm post-winter," Mr Lawless said. 

"Vendors have been reluctant to test the market through the downturn."

On the buyer activity front, 2022 saw capital city home sales fall -16.5 per cent lower than the previous year, however, they ended up +7.4 per cent higher than the five-year average.

Regional markets end the year flat but with mixed results

After a year of ups and downs, Australia's combined regional markets finished 2022 at virtually the same place they started, gaining +0.1 per cent in value over the 12-month period. 

Looking at the state-by-state breakdown, though, one clear winner shone through.

MarketMonthQuarterAnnualMedian value
Regional NSW-1.5%-4.5%-2.7%$691,509
Regional VIC-0.7%-2.9%-1.3%$565,942
Regional QLD-0.8%-3.0%1.9%$550,638
Regional SA0.7%1.8%17.1%$353,485
Regional WA0.5%1.3%5.7%$419,758
Regional TAS-0.3%-1.1%2.4%$514,547
Combined regions-1.2%-3.3%-6.9%$770,374
Combined capitals-1.0%-3.2%0.1%$577,616

Regional SA soared by another +17.1 per cent for the year and continues to see positive monthly growth. WA also maintained a positive trajectory, getting a +5.7 per cent boost in 2022. 

NSW and Victoria, meanwhile, experienced modest annual declines, dropping -2.7 per cent and -1.3 per cent over the 12 months, while QLD and Tasmania held fairly close to their 2021 endpoints.

Regional markets have closely mirrored the capitals over the past quarter. Source: CoreLogic

After the extended boom period for regional homes, those markets have fallen more into step with their capital city counterparts. 

However, relative affordability and a broad lack of available stock have mostly helped the regions weather interest rate hikes more confidently than the capitals.

What's next for the Australian property market? 

There are two key factors that will define the path Australian housing goes down in 2023. 

First is the movement of interest rates, and forecasts are wide-ranging. CBA expects the cash rate will top out at 3.35 per cent — just one further rise from the current 3.10 per cent level — while Westpac and ANZ see a 3.85 per cent peak arriving in May.

There is also the chance that rate cuts will arrive before the end of the year. Whatever happens, it's likely to have a big impact on property prices going forward. 

The other main driver will be buyer and seller activity. After clear hesitation from both sides in the second half of 2022, when will market activity ramp up again? 

“The balance between the flow of new listings and number of home sales will be a key trend to watch through early 2023," Mr Lawless said. 

“We typically see a seasonal surge in the number of new listings added to the market from early February through to Easter.”

"If this seasonal pattern plays out over the coming months against the backdrop of higher interest rates and a further drop in buying activity, we could see housing prices responding negatively as advertised supply levels rise and vendors are forced to discount their prices more substantially."

The upside is Australia's economy and labour markets are in a strong position, and CoreLogic noted that "households are well-placed to deal with rising interest costs through 2023."


1. CoreLogic, 'CoreLogic Home Value Index: Australian housing values down -5.3% over 2022', 02 January 2023