Australia’s Housing Slump Deepens in July
Synopsis
Home prices dropped 0.7% in July, marking the steepest monthly decline since December 2022 as affordability pressures intensified.
Key Highlights
- Sydney and Melbourne recorded the steepest monthly declines, falling 1.4% and 1.2%, respectively.
- Annual home price growth slowed to 5.3%, well below the double-digit pace seen earlier this year.
Australian home prices fell for a second straight month in July, with higher borrowing costs and uncertainty surrounding proposed tax changes adding to the housing market slowdown.
According to property consultancy Cotality, national home prices declined 0.7% in July compared with June, marking the largest monthly fall since December 2022. Annual price growth also eased to 5.3%.
Sydney and Melbourne Lead Declines
Sydney and Melbourne posted the sharpest monthly declines, with prices falling 1.4% and 1.2%, respectively. Both cities are now more than 5% below their recent peak values.
The slowdown also spread to other markets, with Perth’s previously strong housing market showing little movement during July.
Cotality Head of Research Gerard Burg said earlier months’ price data had also been revised lower, highlighting how quickly market conditions have weakened.
He added that new property listings had declined across Australia, particularly in Sydney, as many homeowners delayed selling in the hope of improved market conditions.
RBA Watching Housing Market
Reserve Bank of Australia Governor Michele Bullock also pointed to the weakening housing market this week, fuelling speculation that the central bank may have completed its cycle of interest rate increases after three hikes this year.
A prolonged slowdown in housing activity could have broader economic effects because of the sector’s close ties to construction, real estate services and trades.
Separate figures from PropTrack showed home prices fell 0.3% in July, marking a fourth consecutive monthly decline, while Sydney recorded a 0.6% drop.
PropTrack said uncertainty around proposed tax changes affecting investment properties had likely weighed on buyer confidence, while ongoing price declines may also be encouraging buyers to wait until the market stabilises.
Source: Reuters
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