Amidst Australia’s historic two-year rate hike cycle, the property market has become a picture of resilience and decline, showcasing stark contrasts across cities, suburbs, and regions.

A CoreLogic Australia analysis comparing the property market’s performance two years before and after the rate hike cycle reveals that home values across the nation have risen only 2.8% since April 2022, contrasting sharply with the substantial 31.7% increase observed in the preceding two years.

CoreLogic Research Director Tim Lawless said the relatively small capital gain over the past two years is a legacy of the -7.5% drop in national values during the early phase of the rate hiking cycle when the national index consistently fell between May 2022 and January 2023.

Since CoreLogic’s national Home Value Index bottomed out in January 2023, values have risen every month to be 11.1% higher.

”The perception might be that property values are continually increasing but we can’t forget the short and very sharp downturn that occurred in the immediate aftermath of the first rate increases,” he said.

“Since the market bottomed, there’s been 15 consecutive monthly increases in values nationally, but that performance is not indicative of the entire market. Underneath the headline figure there’s significant diversity in the housing market’s performance.”

Hobart, Melbourne and ACT bear brunt of rate hikes

Nationally, 37.9% of suburbs have recorded a decline in dwelling values since the rate hike cycle began. Hobart suburbs have been hit hardest with 98.0% declining in value, followed by Melbourne at 87.8% and the ACT at 87.6%.

Mr Lawless said these markets had felt the impact of rising interest rates due to a better balance between the underlying demand/supply fundamentals, leading to widespread falls in property values across most suburbs.

“Hobart and Canberra were buoyant with housing activity during the height of the pandemic but they’ve since faced a rise in listings, affordability constraints, and subdued demographic conditions such as negative interstate migration levels,” Mr Lawless said.

Key ACT findings include:

• Australian home values have risen only 2.8% since the rate hiking cycle began in April 2022, a legacy of the -7.5% fall between May 2022 and January 2023. This contrasts sharply with the substantial 31.7% increase observed in the preceding two years.
• Canberra is the second weakest capital city market since rate hikes began. Home values are -6% down, with 87.6% (85) of suburbs still below April 2022 levels.
• Only 4.1% (4) of ACT suburbs are at record highs.
• Taylor and Denman Prospect have been the strongest house markets in the ACT since rates started rising, up 20.1% and 13.8% respectively. Forrest was the strongest unit market, up 9.2%.
• Lyons and Chifley were the weakest house markets, with values down -17.4% and -16.1% respectively, while Kambah was the weakest unit market (-6.6%).
• The median value for dwellings in the ACT is currently $847,604, down from $901,791 in April 22.

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