Property prices falling across more than half of Australia

More than 50 per cent of Australia is now experiencing property value declines and as interest rates rise it’s expected to get worse.

More than half of the country is now experiencing declines in property values.

That is according to a suburb-level analysis from PropTrack for The Australian.

The biggest declines in Sydney through the June quarter were houses in Mulgoa, western Sydney (-22.72 per cent), units in Taren Point, southern Sydney (-22.11 per cent) and units in Manly (-20.44 per cent).

In Melbourne it was houses in Dandenong South in the southeast (-20.86 per cent), houses in Red Hill (-20.36 per cent) and houses in Flinders (-19.34 per cent), both on the Mornington Peninsula.

PropTrack director of economic research Cameron Kusher said the property market in Sydney and Melbourne had already been slowing before interest rates rose in May.

“Interest rates have increased 1.25 per cent in three months,” he told The Australian.

“That means people can’t borrow as much as they could. And if rates go to 2.5 per cent, as expected, that’s going to dramatically reduce people’s ability to pay the prices people are seeking in those markets.”

More than 50 per cent of the country is experiencing property value declines in houses and units. Picture: NCA NewsWire / David Crosling

In Hobart, the data showed units in Battery Point, just south of the CBD, declined the most in the June quarter (-20.58 per cent).

In Adelaide, it was units in the coastal suburbs of Hove and Grange (-16.14 per cent).

Units in the Canberra suburb of Watson declined by -22.89 per cent, the largest across the capital cities, and houses in Griffith declined by -22.42 per cent.

Houses in the affluent Perth suburb of Peppermint Grove dropped -13.34 per cent.

Houses in Larrakeyah, an inner suburb of Darwin, saw a -20.60 decline, and units in Birkdale, Brisbane, declined -22.69 per cent.

All of Australia’s big four banks are unanimously expecting more steep interest pain for borrowers after Westpac and NAB updated their cash rate forecasts.

Westpac, NAB, ANZ and the Commonwealth Bank of Australia are all predicting there will be two 0.50 percentage point hikes in both August and September, meaning four months in a row of 50 per cent increases.

NAB now expects the cash rate to sit at 2.85 per cent by November, while Westpac forecasts it will rise to 3.35 per cent by February next year.

It means someone who had a $500,000 NAB mortgage before the hikes began could be paying $760 more on their monthly repayments, while the monthly repayments for a $500,000 Westpac mortgage could rise by $908 from May 2022 to February next year.

Rental prices have surged while house prices have declined. Picture: NCA NewsWire / David Crosling

While house prices might be falling across the country, the cost of renting certainly isn’t.

Rental prices grew at the fastest pace in seven years in the year to June, according to PropTrack’s latest report.

Weekly rental prices shot up 7 per cent over the year to June. The number of potential renters per listing increased by 20.3 per cent.

The volume of total rental listings were 18.2 per cent lower year-on-year, bringing the volume 27.7 per cent lower than its decade average.