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Australia’s property market is falling again, and suddenly the phrase “solid investment” is doing some very heavy lifting.
New Cotality figures show national dwelling values dropped 1.2 per cent in October, marking seven consecutive months of falls. Values are now 6.7 per cent below their March peak, roughly $63,400 off the value of the median Australian dwelling.
That’s an expensive few months for something that’s mostly been sitting there.
Cotality says the pace of decline across the capital cities is tracking faster than previous downturns over the past 40 years. That doesn’t mean this is already the biggest overall fall, but it puts that record within uncomfortable reach.
A record nobody particularly wants framed above the fireplace.
Higher interest rates are squeezing borrowing capacity and increasing mortgage repayments, pushing buyers to the sidelines. Investor demand has also weakened following federal changes to property tax breaks.
For first-home buyers, falling prices might sound like good news. Unfortunately, a cheaper house doesn’t automatically mean an affordable loan.
It’s like seeing your dream car discounted, then discovering the finance repayments still require a second job and the sale of a kidney.
For existing owners, a lower valuation reduces their equity on paper. It doesn’t automatically create a loss they must realise, but it can complicate plans to sell, refinance or borrow against the property.
And when households feel less wealthy, they may become more cautious about spending, spreading the chill beyond real estate.
The challenge is improving housing affordability without turning mortgage stress into a broader economic problem.
So, yes, prices are coming down. But affordable housing requires more than a smaller number on the listing.
Ideally, you should also be able to afford living there after you’ve bought it.
Craig Hill is a Brisbane-based author, journalist, teacher, business consultant and social justice campaigner. He is the General Manager of the Australian Book and Language Studio.
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