Dramatic slowdown in the Australian property market, house price growth decelerates

Follow us on Google News:
 Dramatic slowdown in the Australian property market, house price growth decelerates
Image source: Pexels


  • The Australian property market is showing some signs of a slowdown.
  • Property price growth slowed to the lowest level since January in November 2021 across Australia.
  • The capital city trends demonstrated greater diversity during the last month.

The Australian housing prices have been breaking records since the outbreak of the COVID-19 pandemic, making it more expensive for first-time homebuyers to purchase their dream home. While property prices continue to remain at the upper end of the curve, the housing market is showing some evident signs of a slowdown.

Must Read: Is the Australian property market taking a breather?

As per the property consultant CoreLogic, the property prices recorded a surge of 1.3 per cent in November, marking an increase for the 14th-straight month. Despite the recent rise in housing prices, the pace of price growth in November was the slowest since January 2021. However, the property consultant observed diversifying conditions as affordability pressures mount and stock levels rise.

What does the latest data say?

The latest data suggests a slowdown in the property price growth of major capital cities – Sydney and Melbourne – where prices increased by 0.9 per cent and 0.6 per cent, respectively. The deceleration in price growth emerged as the number of homes listed for sale kept increasing.

Over recent weeks, stock levels have become far more normalised in these capital cities. While stock levels across Melbourne are sitting 7.9 per cent above the five-year average, the total listings in Sydney were at just -2.6 per cent below the five-year average.

On the flip side, Brisbane and Adelaide recorded the fastest pace of growth in November. The home values in Brisbane were 2.9 per cent up in November (highest since October 2003), while home values in Adelaide were 2.5 per cent up (highest since February 1993). The divergent trends across these capital cities were due to different supply dynamics.

Slowdown in the property price growth of major capital cities

Good Read: Five ASX-listed property developers to keep on watchlist for 2022

Interestingly, the slowdown in property market conditions was less evident across the regional areas, where the monthly pace of capital gains has improved over the last three months. From a capital growth perspective, Regional New South Wales (2.4 per cent month/29.1 per cent year) and Regional Tasmania (2.5 per cent month / 29.8 per cent year) were the standouts.

The regional areas were seen to be benefitting from the increasing popularity of remote working arrangements, together with renewed demand for lifestyle and coastal properties. In several cases, more affordable housing options drove capital gains in regional areas.

Do Not Miss: CBA predicts housing prices to drop 10%; Here’s when

Is the property boom nearing its peak?

The slowing momentum of property prices across the major capital cities suggests that the latest housing boom might be nearing its peak. Most of the factors that have been driving property prices higher have lost some potency in recent months.

The advertised inventory is rising across most regions, strengthening the supply-side dynamics. At the same time, fixed-term mortgage rates are increasing, which might act as a disincentive for some buyers, who were primarily flocked to the housing market due to record-low mortgage rates. At a time when the nation’s banking regulator has tightened lending rules, one can expect a further slowdown in housing activity in the months ahead.

What lies ahead for the Australian property market?

However, it is hard to neglect some tailwinds that may continue to support an upward trajectory in home values over the short term. As Aussies become more and more vaccinated, one can expect less frequent disruptions from the pandemic. Meanwhile, the reopening of international borders, which is likely to resume overseas migration, will also be a net positive for housing markets. Nevertheless, the new Omicron variant presents some additional risk for these tailwinds.

Must Watch: Impact of climate change policies on housing market


The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK