Access our news and insights

Sign up to receive our regular newsletter with insights, portfolio and event updates delivered straight to your inbox.

Lonsec   ⟩   News & Insights   ⟩   News   ⟩   Australia’s property market falls at fastest rate in decades
Lukasz de Pourbaix

AuthorLukasz de Pourbaix

TitleChief Investment Officer, Lonsec Investment Solutions

DateJanuary 8, 2019



The housing market continues to dominate the headlines in Australia. Housing prices fell 4.8% in 2018 according to CoreLogic, driven by sharp falls in the Sydney (-8.9%) and Melbourne (-7.0%) markets. Price falls are now also evident in the middle and lower segments of the market, while auction clearance rates and volumes are trending lower. Lending to investors and ‘upgraders’ has slumped as banks tighten lending criteria. Suggestions that a potential credit crunch will lead to further significant declines in house prices has some commentators projecting that Australia’s record 27-year run without a recession is coming to an end.

Monthly % falls in Sydney and Melbourne house prices

Source: CoreLogic

The RBA sees the correction in house prices and the tightening of lending conditions as a healthy development, reducing financial stability risks and potentially prolonging the cycle. Investor loans have decreased, interest only loans have declined, and loan-to-value ratios are lower. The RBA recognises, however, that the high levels of household debt and falling house prices could amplify a downturn in the case of an external shock to growth.

IMPORTANT NOTICE: This document is published by Lonsec Investment Solutions Pty Ltd (Lonsec), ACN 608 837 583, a corporate authorised representative (CAR number 1236821) of Lonsec Research Pty Ltd, ABN 11 151 658 561, AFSL 421 445.

Please read the following before making any investment decision about any financial product mentioned in this document.

Warnings: Lonsec reserves the right to withdraw this document at any time and assumes no obligation to update this document after the date of publication. Past performance is not a reliable indicator of future performance. Any express or implied recommendation, rating, or advice presented in this document is a “class service” (as defined in the Financial Advisers Act 2008 (NZ)) or limited to “general advice” (as defined in the Corporations Act (C’th)) and based solely on consideration of data or the investment merits of the financial product(s) alone, without taking into account the investment objectives, financial situation and particular needs (“financial circumstances”) of any particular person.

Warnings and Disclosure in relation to particular products: If our general advice relates to the acquisition or possible acquisition or disposal or possible disposal of particular classes of assets or financial product(s), before making any decision the reader should obtain and consider more information, including the Investment Statement or Product Disclosure Statement and, where relevant, refer to Lonsec’s full research report for each financial product, including the disclosure notice. The reader must also consider whether it is personally appropriate in light of his or her financial circumstances or should seek further advice on its appropriateness. It is not a “personalised service” (as defined in the Financial Advisers Act 2008 (NZ)) and does not constitute a recommendation to purchase, hold, redeem or sell any financial product(s), and the reader should seek independent financial advice before investing in any financial product. Lonsec may receive a fee from Fund Manager or Product Issuer (s) for reviewing and rating individual financial product(s), using comprehensive and objective criteria. Lonsec may also receive fees from the Fund Manager or Financial Product Issuer (s) for subscribing to investment research content and services provided by Lonsec.

Disclaimer: This document is for the exclusive use of the person to whom it is provided by Lonsec and must not be used or relied upon by any other person. No representation, warranty or undertaking is given or made in relation to the accuracy or completeness of the information presented in this document, which is drawn from public information not verified by Lonsec. Conclusions, ratings and advice are reasonably held at the time of completion but subject to change without notice. Lonsec assumes no obligation to update this document following publication. Except for any liability which cannot be excluded, Lonsec, its directors, officers, employees and agents disclaim all liability for any error, inaccuracy, misstatement or omission, or any loss suffered through relying on the information.

Copyright © 2018 Lonsec Investment Solutions Pty Ltd, ACN 608 837 583, a corporate authorised representative (CAR number 1236821) of Lonsec Research Pty Ltd, ABN 11 151 658 561, AFSL 421 445. All rights reserved.

Want to find out more?

Get in touch to find out how we can help you start implementing managed portfolio solutions for your clients. Call us on 1300 826 395 or email

Related stories

6 Feb 2019 - Vertical integration in the advice sector has been a point of discussion within the financial services industry for many years. There are obvious conflicts ...

Managed accounts can’t fly under the regulatory radar

By Lukasz de Pourbaix Read now

10 Jan 2019 - 2018 was marked by a notable increase in market volatility and a decline in global economic growth from its previous high in the first part of the year. This ...

Are we late cycle?

By Lukasz de Pourbaix Read now

3 Dec 2018 - This article is intended for licensed financial advisers only and is not intended for use by retail investors. Markets have continued to experience ...

Portfolio diversification in volatile markets

By Lukasz de Pourbaix Read now