After near-record rises during the pandemic, home prices in Australian capital cities are now slowing at their most rapid pace since 1989, according to new data.
The slowdown over the last six months is worse than the stagnation and turbulence which hit the housing market in 2004 and the Global Financial Crisis in 2008.
Just-released PropTrack analysis found the annual rate of home price growth in capital cities had dropped from 24 per cent, in January, to 14 per cent.
The RBA surprised many economists by raising the cash rate by half a percentage point, the biggest hike in more than 20 years, with warnings of more to come.
The RBA surprised many economists by raising the cash rate by half a percentage point, the biggest hike in more than 20 years, with warnings of more to come. (SMH / Sam Mooy)
However, despite cooling in the market, prices are still up 35 per cent since the start of the pandemic.
Prices in Sydney have slowed at the fastest pace since 1989, PropTrack reported, with Melbourne suffering its quickest slowdown since 2010 and Brisbane since 2008.
Property growth in Hobart has fallen away the quickest of any period since 1986, while Adelaide and Perth have also stagnated.
Economist Paul Ryan said the slowdown was perhaps “not surprising” and blamed recent interest rate rises, with further Reserve Bank hikes expected over the remainder of the year.
“Looking ahead, the rapid slowdown in price growth signals the housing market is likely to continue to see slow growth over the rest of 2022,” he said.
Buyers will be hesitant because there is now so much uncertainty about how high mortgage repayments could rise, he said.
“Resolving this uncertainty about the path of interest rates will be the key element buyers look for over the rest of the year.”

Ryan said it was normal for house prices to come down after periods of sustained growth, but the sudden six-month deceleration was a potential concern.
“Perhaps this is not surprising,” he said of current market conditions, pointing to 2021 as the third fastest period of home price growth in Australia’s history.
“However, it’s not necessarily the case that growth falls rapidly after a run-up.
“In general, the market moves more gradually, indicating there are other factors involved.”
The Reserve Bank yesterday lifted the nation’s interest rates for the second month in a row, raising it by 0.5 per cent, at the higher end of expectations.
It is the largest monthly rate hike since February 2000 and now takes rates to higher than they were prior to the start of the COVID-19 pandemic.
Post Views: 571