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Australian unit market two-part performance

Posted by societyrealestate on 16/01/2023

The Australian unit market’s performance in 2022 can be split into two acts. The first four months of the year were characterised by an easing in the monthly growth rate, resulting in a modest 1.1% rise in values between December 2021 and April 2022.

Increasing interest rates, low consumer confidence and persistently high inflation dominated the second act, adding downward pressure on values and taking unit values -5.2% below their April peak. While the detached housing market followed a similar pattern, one difference between the two housing types has been the severity of these value movements.

CoreLogic Economist Kaytlin Ezzy said the current downturn, May to December 2022, has shaved approximately -$73,000 off the average Australian house value, compared to a decline of -$32,400 in the average national unit value.

“Historically, house values have been more volatile than units, recording larger gains through the upswing and larger depreciation during a downswing. The current cycle has been no different,” she said.

“As the downturn matures, the resilience of the unit market has now become evident in the annual growth trend, with the annual performance gap between house and unit values inverting for the first time since May 2020 in November (-50 basis points) and widening further in December(-150 basis points).”

“This is in stark contrast to September 2021, when the annual performance gap between houses and units peaked at 10.9 percentage points.”

Source Corelogic

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