Australian home prices declined for a further month in July, with broad-based falls across the capital cities, even as national values remain higher than a year ago.
Sydney recorded the steepest monthly drop at 0.6%, followed by Hobart and Adelaide, both down 0.5%, and Melbourne, down 0.4%. Darwin was the only capital to post a gain, edging up 0.1%.
"Home prices fell by 0.3% across Australia in July, with broad-based declines across the capital cities," REA Group senior economist Angus Moore (pictured) said.
Moore linked the slowdown to the compounding effects of recent monetary policy tightening and updated investor tax settings, noting "the cumulative impact of three interest rate rises and changes to investor tax settings have dampened buyer demand, driving a broad-based slowdown in home prices and market conditions."
The rate hikes behind that slowdown have paused for now: the RBA held the cash rate at 4.35% for a second straight meeting on 11 August, with further hikes still "on the table."
Moore added that the downturn has hit premium markets hardest, observing "prices in more expensive segments of the market have declined more than in more affordable areas and segments, a common pattern in interest-rate-driven downturns."
Regional markets have also again outperformed the capitals, with prices flat over the month, while unit values have proven more resilient than houses.
New listing activity told a divided story by city. Sydney and Melbourne recorded fewer new listings than a year earlier, down 16.9% and 14.3%, respectively, while Brisbane, Adelaide, and Perth all saw new listings rise annually, with Perth up 24.3%. Nationally, total buy listings were 4.2% higher than a year ago, giving buyers slightly more choice.
Auction clearance rates, a closely watched gauge of buyer appetite, have lifted modestly since early June lows but remain well below levels seen a year ago in both Sydney and Melbourne.
Moore said the soft results point to ongoing friction between buyers and sellers, noting "low clearance rates are consistent with softer market conditions amid a pullback in buyer demand, and suggest an ongoing mismatch in price expectations between buyers and sellers," adding this dynamic is "likely to lead to further declines in home prices over the coming months."
That caution shows up in household mood too: the Westpac–Melbourne Institute Consumer Sentiment Index climbed 4.1% to 83.9 in July, up from June's 80.6, though the reading still sits in the bottom 10% of results recorded over the survey's 50-year history.
Median time on market has stretched by roughly a week nationally since April. Perth has seen the sharpest shift, with typical selling times lengthening from 29 days in April to 40 days in July as new stock floods the market — though sales times there remain broadly in line with a year ago.
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