Australian housing markets have fallen sharply in the first three months

House prices in some of the most exclusive housing markets in the country have fallen sharply in the first three months of the year as worsening affordability weighed on the demand, data from CoreLogic shows.

House prices in Zetland, Surry Hills, Forest Lodge and Birchgrove have recorded steep drops of 6.3 per cent, 6.1 per cent, 5.2 per cent and 4.9 per cent respectively.

In Melbourne, house prices in South Yarra fell by 4.8 per cent, 4.4 per cent in Toorak and was down by 4.3 per cent in Park Orchards and Wonga Park.

Median house price in Beaconsfield in Sydney’s inner south posted the largest decline of 7.2 per cent.

Tim Lawless, CoreLogic’s research director said the top end has been decelerating the fastest since the markets started to turn.

“Sydney’s upper quartile was actually down 0.6 per cent in March, while the lower quartile or most affordable end of the market actually did see a rise of 0.1 per cent,” he said.

“Similarly, in Melbourne, you can see very similar trends – the upper quartile fell by 0.5 per cent over the month, while the lower quartile was up 0.4 per cent.

“This is a typical phase of the cycle where you do see the top end of the market leading the up swings as well as the downturns. So, it does look like the more premium markets are more susceptible to a downturn in the environment. The chances are, the lower end of the marketplace will follow suit, but maybe with a bit of a lag.”

By contrast mortgage-belt suburbs dominated the best performing housing markets in the first three months of the year, with house prices jumping by as much as 13.5 per cent, and defying the broader slowdown in home values.

Logan Central in Brisbane’s Logan-Beaudesert area notched up a 13.5 per cent price gain in just three months – the fastest growth for a capital city suburb, followed by Woodhill and Cedar Vale also in the same region with 12.9 per cent and 12.8 per cent rise respectively.

In Sydney, affordable suburbs in the south-west, such as Bonnyrigg Heights, Elizabeth Hills, and Wetherill Park also defied the slowdown with house values climbing by more than 5 per cent each.

“The buyer pool for cheaper properties is a lot larger, so there’s more potential for prices to rise,” said Nerida Conisbee, Ray White’s chief economist.

“With first home buyers being a focus of the budget, there will be an increase in their activity over coming years. I would say overall that the factors that make cheaper properties a better performer long term will continue to hold – a bigger buyer pool and a focus on helping those that need affordable property.”

Units in Wyndham Vale, West Melbourne and East Melbourne also posted strong growth, with the median unit values rising by 6.7 per cent, 6.5 per cent and 6.2 per cent respectively.

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