Australian home values fall for a seventh straight month, and Cotality says the downturn is the fastest in 40 years

Australian home values fell for a seventh consecutive month in October, and property data firm Cotality says the slump is on track to become the largest of the past 40 years. This report draws on ABC News, The Sydney Morning Herald and MarketWatch. ## The October figures Cotality's national Home Value Index fell 1.2 per cent in October, leaving values 6.7 per cent below their March peak, a fall of about $63,400 in the value of the median Australian dwelling, ABC News, the Herald and MarketWatch report. The Herald puts that at more than $9000 a month. The index puts the median national house price at $884,855, ABC News reports. Combined capital-city values are down 8.1 per cent in seven months, ABC News and MarketWatch report. Cotality head of research Gerard Burg told ABC News that the previous record downturn, from 2017 to 2019, was an 8.2 per cent fall across the combined capitals, "so it looks like we're easily going to push past that mark". Brisbane and Perth are now falling faster than Sydney, with dwelling values down 2 per cent and 1.7 per cent in October against 1.6 per cent in Sydney, MarketWatch reports. The Herald, measuring house values, puts Sydney's October fall at 1.9 per cent and Brisbane's at 2 per cent, and reports that house values rose 0.6 per cent in both Hobart and Darwin. Sales have dropped sharply. Cotality's modelled estimates put sales over the past three months 23 per cent below a year earlier and 18 per cent below the previous five-year average, ABC News and MarketWatch report. Auction clearance rates across the combined capitals are consistently below 50 per cent, and the median time on market, at 39 days, is the highest since August 2020, ABC News reports. ## Why values are falling "This is really a demand-led downturn," Burg told ABC News, saying higher interest rates had reduced borrowing capacity and increased repayments, which had "pushed a lot of buyers to the side". Cotality research director Tim Lawless said affordability and serviceability constraints were the earliest pressures on demand, amplified by four interest rate rises, persistently low confidence and cost-of-living pressures, MarketWatch reports. Lawless also pointed to the run-up in prices in recent years and the government's budget measures, the Herald reports. Treasurer Jim Chalmers told the Herald's Inside Politics podcast that the budget's tax changes had contributed to the fall but were not the only reason. "I think it would be dishonest to say that the tax changes are solely responsible, or that they're not responsible at all," he said, according to the Herald. ## Rate decision on Tuesday Financial markets and economists expect the Reserve Bank to raise rates again on Tuesday, the Herald reports, and MarketWatch also says a fifth rise this year is expected. AMP chief economist Shane Oliver expects the cash rate to go to 4.85 per cent, according to the Herald. Burg said buyers were likely to hold back until the Reserve Bank signalled a change of direction on rates, which he said probably would not happen until the second half of 2027, ABC News reports.