Brisbane house prices are falling at a record pace, according to CoreLogic’s daily dwelling values index.
The quarterly rate of value decline accelerated to 3.6% as of 11 September, which is the fastest rate of decline since September 2008:
Brisbane’s peak-to-trough decline has also hit 3.6%, with prices in freefall:
The next chart plots the Brisbane’s current dwelling correction (shown in black) against prior episodes, using the CoreLogic monthly hedonic index:
While Brisbane’s current correction (-3.6% after three months) has a long way to go before it reaches the depths of the 2010-12 bust (-10.8% over 21 months) or the 2008-09 correction (-8.6% over 10 months), the current pace of decline is the fastest on record at this stage of the downturn (i.e. three months in).
Brisbane dwelling values experienced an epic 44% increase in values over the pandemic (i.e. between March 2020 and June 2022). Therefore, it stands to reason that Brisbane’s housing correction will exceed the 2010-12 episode in response to the Reserve Bank of Australia’s (RBA) monetary tightening.
Sharp price booms are typically followed by solid corrections. And Brisbane’s boom over the pandemic was one of the nation’s biggest on record. Accordingly, Brisbane dwelling values should inevitably revert back to some kind of ‘fair value’.
The bottom won’t arrive until after the RBA stops increasing interest rates, whenever that is.
Given last week’s monetary policy statement accompanying the RBA’s 0.5% rate hike explicitly stated that “the Board expects to increase interest rates further over the months ahead”, it is safe to assume that Brisbane’s dwelling values are a long way from bottoming.