Housing Prices in Australia Fall Amid Rate Hike, Rising Costs


Rising interest rates and more expensive living costs have snapped a 20-month streak of increasing housing prices in Sydney and Melbourne.

Prices nationwide fell 0.1% in May, dragged down by a 0.3% drop in the major cities, according to data from CoreLogic.

While annual growth slowed, it was still solid at 14.1% reflecting the huge gains enjoyed over 2021.

Housing prices in Sydney dropped a steep 1.0% in May, while Melbourne fell 0.7%. Sydney prices are down 1.5% from their January peak but still up 23% on pre-pandemic levels.

Most other cities fared better with Brisbane rising 0.8% in May, Adelaide 1.8% and Perth 0.6%.

The regions continued to benefit from a shift to country living and greater space, and prices rose 0.5% in May to be 22.1% higher than a year ago.


Prices Weaken in Big Cities

Weakness in the highly priced Sydney and Melbourne markets in part reflected the Reserve Bank of Australia’s move to raise interest rates in early May, the first rise in 11 years.

“Housing has been getting more unaffordable, households have become increasingly sensitive to higher interest rates as debt levels increased, savings have reduced and lending conditions have tightened,” CoreLogic’s research director Tim Lawless said.

“Now we are also seeing high inflation and a higher cost of debt flowing through to less housing demand.”

Supply was turning buyers’ way with listings rising to above average levels in Sydney and Melbourne, while clearance rates at auctions have steadily declined.

Demand had also come off the boil with home sales in Sydney down 33% in the three months to May from the same period a year earlier, while Melbourne was off 21%.

A sustained drop in housing prices would be a drag on consumer wealth given the notional value of Australia’s 10.8 million homes is put at A$9.9 trillion ($7.11 trillion).


  • Reuters, with additional editing by George Russell



Chairman, CEO Quit as Australia’s AGL Dumps Breakup Plan

Australian Casino Fined $57m For Illegal China Funds Transfer

Australian Central Bank Warns of More Interest Rate Rises


George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

Recent Posts

Pro-China Candidate Muizzu to be Maldives’ New President

Former housing minister Mohamed Muizzu, who has vowed to develop warmer ties with Beijing, will…

14 hours ago

BOJ Not Afraid of Cost of Phasing Out Stimulus, Ueda Says

Bank of Japan Governor Kazoo Ueda says there is "still a way to go" before…

16 hours ago

New Home Prices Edge up in China, After Falling for 4-Months

Developers sped up the launch of new and higher-quality housing projects to to take advantage…

22 hours ago

ADB Agrees to $300m Loan to Transform Chinese Coal City

The Asian Development Bank said on Saturday it approved a $300 million loan to Changzhi…

2 days ago

China’s Factory Activity Expanded in September, Survey Finds

Official manufacturing survey for September suggests the country's economy is beginning to bottom out, analysts…

2 days ago

China Wants to be World’s Dominant Power: Blinken – AFP

China wants to surpass the United States and recover what they believe is their rightful…

3 days ago