For instance, there was a short-lived fall from April 2020 during the Covid-19 pandemic lockdowns, when the average capital city home value fell by 1.5% over three months.<\/p>\n
Two years later, and at the tail end of a massive boom, there was a much steeper decline after the RBA started its rearguard battle against roaring inflation.<\/p>\n
Between April 2022 and January 2023, prices dropped by 8.1%.<\/p>\n
The largest downturn in property prices in recent memory started in September 2017, when average capital city home values declined by 8.2% \u2013 albeit over a much longer 19 months. That time it was a regulatory crackdown on investor lending in an attempt to squash some of the speculative fervour that had gripped the market.<\/p>\n
Which brings us to today.<\/p>\n
Sign up for the Breaking News Australia email<\/a><\/p>\n Oliver forecasts that average prices across the capital cities will keep falling until about April next year, capping a 7.8% drop from top to bottom.<\/p>\n That would certainly make it among the steepest falls in the past four decades \u2013 UBS says the average since the early 1990s has been a 5% decline over 13 months.<\/p>\n Oliver says this year\u2019s home price declines started with the three straight interest rate hikes but are now more about the shift in sentiment triggered by the government\u2019s changes to property investor taxes \u2013 a psychological twist that makes it harder to predict how things will turn out from here.<\/p>\n \u201cSo far it looks similar to past cyclical downturns, but I think it\u2019s early days yet,\u201d he says.<\/p>\n It\u2019s also worth noting that the downturn looks very different depending on where you are in the country, as analysis from NAB shows.<\/p>\n For example, the bank\u2019s economists predict the peak-to-trough declines in Sydney and Melbourne will be in the order of 10%, versus 2% to 4% falls across the mid-sized capitals. And looking at performance by calendar year \u2013 instead of just the periods where prices are falling \u2013 values in Brisbane, Perth, Adelaide and Hobart are predicted to be higher in 2026.<\/p>\n
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