Australian home prices fell for a fourth consecutive month in July, dipping 0.3% nationally, according to the latest PropTrack Home Price Index. Values are now 1.8% below their peak, even as they remain 3.9% higher than a year ago.
Sydney recorded the steepest monthly drop of the major capitals, down 0.6%, followed by Adelaide, Hobart, and Canberra, each down 0.5%. Darwin was the only capital to buck the trend, edging up 0.1% to a fresh peak, though PropTrack senior economist Anne Flaherty (pictured) noted the pace of that growth "has moderated."
Flaherty pointed to a mix of factors squeezing prices.
"High interest rates are weighing on prices, with the impact of reduced borrowing capacities being exacerbated by ongoing cost of living pressures," she said. "Budget tax changes are also likely impacting overall buyer confidence, while ongoing price falls could be driving some buyers to delay purchasing until prices stabilise."
Independent data points in the same direction: Cotality's own July figures recorded a steeper 0.7% national fall over the month, also led by Sydney and Melbourne.
Despite the recent run of monthly declines, most capitals remain in positive territory over the past 12 months.
Perth and Darwin were the standout performers, each up 14.9% annually, with Brisbane (11.1%), Adelaide (10%) and Hobart (7.8%) also posting solid gains. Sydney, Melbourne, and Canberra were the exceptions, down 1.6%, 2.7% and 0.9% respectively over the year.
Flaherty flagged the divergence as a key theme for the market right now.
"Though prices are lower in Sydney, Melbourne, and Canberra annually, they are still sitting significantly higher in Perth, Darwin, Brisbane, and Adelaide compared to a year ago," she said.
Regional markets continued to hold up better than their capital city counterparts, with most regional areas steady over the month. Regional SA was a notable bright spot, up 0.6% in July and 12.7% over the year, while Regional WA posted 14.2% annual growth.
PropTrack's outlook suggests the softening trend has further to run.
"Further price falls are likely to be seen over the coming months," Flaherty said. "While inflation moderated in June, it remains elevated and there is still a risk that interest rates could move higher before the end of the year." That risk will face its first test at the RBA's next meeting on 11 August, when the board decides whether to extend its pause or resume tightening.
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