The Australian capital city suburbs where house prices have actually fallen

Australia’s property market is booming but there are some suburbs bucking the trend, with house prices falling by almost 13 per cent in some postcodes over the past year,  new data shows.

Nationally, house prices rose by 21 per cent over the year to September but some pockets of capital cities saw prices drop as the “COVID-19 effect” of lockdowns, online auctions and border closures took their toll.

Some of the biggest house price falls were in Melbourne, where the property market was moved entirely online – with property inspections and auctions all held in cyberspace for a substantial part of 2020 and 2021.

The inner-city suburb of Brunswick West saw house prices fall by 12.8 per cent over the year to September, the latest Domain House Price Report shows, to a median of $937,000. In North Melbourne, house prices fell 10.5 per cent to a median of $1.15 million. 

Domain chief of economics and research Nicola Powell said coronavirus and people’s desire to find more space as they worked from home had impacted some areas in capital cities, particularly Melbourne. 

“It could be that people moving further away from the cities during COVID has seen some of these prices fall,” Dr Powell said. “However, it’s pretty amazing how few suburbs have seen falls nationally.”

Unlike Melbourne, Sydney only saw house prices fall in one suburb – Cabramatta, in the city’s south-west, where they dropped by 2 per cent to a median of $730,000.

While the rest of the city saw huge price hikes, Aus Property director and buyers agent Lloyd Edge said Sydney’s lockdown and online auctions may have had an impact on Cabramatta’s prices.

“There’s a couple of things there – Cabramatta was one of the major LGAs of concern, which probably scared people off from buying there,” Mr Edge said. “Rental vacancy rates are also higher and that means investors would look at that and not want to buy.”

While prices had fallen, Mr Lloyd said, it gave the area an opportunity for growth in the future.

“It’s got the potential to have some good house price growth over the next two to five years,” he said.

That potential also existed in pockets of Brisbane, where house prices had fallen despite an influx of buyers from other capital cities looking for more affordable homes in a city that was not in lockdown.

The biggest falls were in Brisbane’s northern and western suburbs, data showed, including Taigum, where house prices fell by 9.3 per cent to a $440,000 median. 

The next-biggest drop was in Fernvale, in Brisbane’s outer west, where house prices fell 8.4 per cent to a $366,000 median.

Westpac senior economist Matthew Hassan said these falls could be an indication that there were fewer “COVID refugees” from Sydney and Melbourne moving to these areas, though there was still a lot of interest in some areas, including the Gold and Sunshine coasts.

“Brisbane really has the strongest fundamentals because it has a much lower exposure to the lack of international migration that has hit Sydney and Melbourne,” Mr Hassan said. “Prices weren’t overheated in the last cycle, which makes houses more affordable [and more attractive to buyers].”

Closed borders in Queensland and other states, including South Australia and Western Australia, would also have left a mark on the housing market, he added.

In Adelaide, the Adelaide Hills suburb of Woodside saw prices fall by 9.9 per cent over the year to September to a median $385,000, while in Perth, the uber-expensive suburb of Applecross fell 12.4 per cent over the year to a $1.185 million median, and ritzy Mount Pleasant dropped 10.8 per cent to $1,002,850, data showed.

Dr Powell said price falls in more premium suburbs, like those in Perth, could start a ripple effect of price falls to other suburbs.

“What’s really strong in the market cycle is you do get that ripple effect, when prices reach their peak they start to come off – the upper end leads this,” she said. “So some of these more premium areas that have had double-digit price growth over the past year could see falls while other areas moderate. 

“It will be very interesting to see what the future holds.”