This is perhaps the most important conclusion for investors, developers and businesses.
The Australian market is increasingly dividing into three groups:
🔴 Group 1 — Correction markets
Sydney
Melbourne
Canberra
These markets have significant affordability problems and are experiencing more substantial price declines.
Sydney and Melbourne are already more than 5% below their recent peaks according to Cotality.
🟠Group 2 — Former boom markets now cooling
Brisbane
Perth
Adelaide
Hobart
These markets had very strong growth and are now experiencing the normal consequence of:
high prices → affordability constraints → lower borrowing capacity → slower sales → price correction.
Brisbane and Perth are particularly important because they went from being among the strongest markets to showing clear signs of slowing.
🟢 Group 3 — Resilient markets
Darwin
Regional Queensland
Regional WA
Regional SA
Selected regional NSW/Victoria/Tasmania
Regional markets have generally been much more resilient than capital cities. PropTrack reports that combined regional prices were essentially flat in July while regional prices remained about 8% higher than a year earlier.