House prices keep falling as borrowers brace for next rate hike - 9News

House prices fell 1.4 per cent across Australia last month, and a leading analyst has warned the worst of the downturn may still be looming.

After rising more than 25 per cent over the recent boom cycle, housing values across combined capitals are now 5.5 per cent below the recent peak, according to new data from property firm CoreLogic.

Sydney continues to record the largest falls, with values down 9 per cent from the city's January peak, losing on average $104,300.

Parts of Sydney's northern beaches have suffered the biggest drops in price, since January highs. (Getty)

The largest falls in Sydney have been concentrated in areas of the northern beaches, including Warringah, Pittwater and Manly, down at least 14.5 per cent, the report said.

Notable price drops had also hit flood-affected areas across Richmond Tweed in northern NSW, the report added.

Brisbane has almost caught up with Sydney's monthly rate of decline, and is now 4.3 per cent below its June high.

CoreLogic's Tim Lawless said it is "probably too early" to suggest the housing market has now moved through the worst of the downturn.

"It's possible we have seen the initial shock of a rapid rise in interest rates pass through the market and most borrowers and prospective home buyers have now 'priced in' further rate hikes," he said.

However, Lawless said if interest rates continue to rise as rapidly as they have since May, "we could see the rate of decline in housing values accelerate once again."

AMP chief economist Dr Shane Oliver is expecting a 25 basis point hike, but a bigger increase is still very much on the cards, he said.

The cash rate has surged 225 basis points since May, heaping big pressure on household budgets struggling with rising costs of living.

Interest rates have not risen this fast since 1994.

A borrower with a $750,000, 30-year mortgage is now paying around $940 more each month than pre-rate hikes.

The rapid hikes have dented market confidence.

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At a time when the flow of new property listings is typically ramping up, the spring selling season is off to a slow start, CoreLogic said.

The number of new listings added to capital city housing markets in September was 12 per cent lower than a year ago, and 10 per cent under the previous five-year average.

Darwin and Canberra are the only exceptions, with both cities recording a higher than average number of new listings over the past four weeks.

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

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2022-10-02 20:51:46Z
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