Home values fall at the fastest pace in 40 years: what it means if you're building

Australian home values fell for a seventh straight month in October. Capital city values are now falling faster than in any downturn in the past 40 years. But if you're building a new home, the cost of land and construction hasn't followed them down.

Cotality's national Home Value Index fell 1.2% in October, according to its November report. Values are now 6.7% below their March peak, which Cotality says equals about $63,400 off the value of the median Australian dwelling. The national median dwelling value is now $884,855.

The combined capitals index is down 8.1% in seven months. Over the same period, the 2022-23 downturn saw a 7.0% fall, and the 2017-19 downturn a 1.2% fall. That 2017-19 slump is the largest on record, at 8.2% from peak to trough. Cotality head of research Gerard Burg told the ABC: "We are already on track to see the largest downturn across the past 40 years."

A new house for sale in Corinda, Brisbane. Brisbane recorded the sharpest monthly fall of any capital in October. Photo: Kgbo / Wikimedia Commons, CC BY-SA 4.0

Brisbane and Perth now lead the falls

Brisbane (down 2.0%) and Perth (down 1.7%) overtook Sydney (down 1.6%) for the fastest monthly decline. Cotality research director Tim Lawless said "virtually every suburb" across Brisbane, Perth and Adelaide had recorded a drop in values over the past three months.