The past 12 months have seen the largest annual fall of Australian home values since 2012, according to new reports from property data company CoreLogic.
The Corelogic Hedonic Home Value Index report found that home values fell 0.6 per cent nationwide in July 2018, and are down 1.6 per cent in 12 months.
The downturn in the property market isn’t just restricted to Sydney and Melbourne either (although, the decline has hit properties in Melbourne and Sydney the hardest). Values slipped in five of the eight capital cities just in the past three months, while regional areas where the market has generally been more resilient have also seen a drop in value.
Some of the worst affected places are Perth and Darwin, where prices have fallen 2.3 per cent and 6.2 per cent respectively over the past 12 months.
However, CoreLogic warns that housing affordability is still a big issue in Australia, and that prices would have to fall much further before they reach an adequate level.
"We can't see any factors that may halt or reverse the housing markets trajectory of subtle declines over the second half of 2018," Corelogic head of research Tim Lawless told the Australian Financial Review.
Economists are now warning that the worst is yet to come, anticipating a faster decline in house prices than initially expected, citing their original estimate of a 12 per cent fall as ‘optimistic’, while CoreLogic predicts a rise in interest rates thanks to higher funding costs.