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Australian Home Prices Slide: What's Next?
8 Jul
Summary
- Median dwelling price fell 0.7% to $937,000 by June.
- Home prices rose over $400,000 in the past decade.
- Even a 10% drop means 15 years of disposable income cost.
House prices in several Australian capital cities have experienced a downturn in recent months, with predictions from major banks suggesting a 2-3% fall by the year's end. This recent decline, however, follows a decade of substantial price increases, leaving the issue of housing affordability largely unresolved.
Data from Cotality indicates that Australia's median dwelling price reached a peak of $944,000 in March. By the close of June, it had retreated to $937,000, representing a 0.7% decrease. Over the preceding ten years, the median home price has surged by more than $400,000.
Further analysis reveals the significant impact on affordability. In 2016, the average Australian dwelling cost was equivalent to 13 years and four months of a typical household's disposable income. As of March this year, this figure had climbed to over 17 years. Even with a potential 10% decrease from the March peak, the median dwelling would still represent more than 15 years of a household's disposable income.
