Australia's most expensive homes are declining in value, with high-end houses in Sydney and Melbourne down more than 10 per cent from peak levels.
Homes valued in the top 25 per cent have dropped 10.7 per cent below peak levels in Sydney and 10.5 per cent in Melbourne, according to property data.
Cotality's September housing charts, which track housing value movement, reported that the median value of these expensive homes is $2.1 million in Sydney and $1.2 million in Melbourne.
However, lower-priced homes and units have continued to show greater resilience, it found.
Home values decline in Brisbane, Adelaide and Perth
Cotality head of research Gerard Burg said the decline had spread beyond Sydney, Melbourne and Canberra, which were the first cities to turn and continued to record the largest cumulative falls.
"More recently, however, home values have also started declining across Brisbane, Adelaide and Perth, demonstrating that the downturn is now affecting a broader range of markets," he said.
In contrast, price declines across Brisbane, Adelaide and Perth have been more evenly distributed across all price points, reflecting their later entry into the downturn, he said.
Herron Todd White group CEO Peter Maloney said buyers at the top end of the market generally had greater capacity to delay a purchase, while sellers could take longer to adjust their expectations.
"But it's important not to treat prestige property as one national market," he said.
National annual sales fall
Australian Centre for Housing Research director Emma Baker said the correction in the market had mostly affected investors.
"Some of it, I suspect, is investors stepping back and waiting to see what happens," she said.
The professor said home buyers were in the market for a different reason and that they were less concerned with financial strategy and waiting to see how the federal governments tax changes play out.
"Especially at the lower end of the market … a household looking for a relatively affordable home often still needs somewhere to live and has a fairly narrow part of the market it can realistically buy into," she said.
"At the higher end, buyers are more able to delay, compromise or simply decide that a property is not worth the asking price."
National annual sales fell by 2.7 per cent over the year to August, with capital cities down 5.2 per cent, the Cotality data shows.
Meanwhile, regional sales rose 1.8 per cent, but Professor Baker said localities classed as regional varied widely, and included areas close to major cities and large regional cities.
Housing downturn linked to many factors
Mr Maloney said affordability was stretched, borrowing costs remained elevated and, in several markets, buyers then had more stock to choose from.
"That shifts negotiating power towards the buyer and can put downward pressure on values."
Unit market value also downtrending
Mr Burg said a similar trend was evident across the unit market.
"[But] units have generally proven more resilient throughout the downturn, supported by their relative affordability and lower entry price points," he said.
"While higher value units have generally recorded larger declines than lower value stock, the gap is smaller than what we are seeing across detached housing."
According to Mr Burg, Canberra's unit market had "bucked the pattern", with lower-value units recording larger declines than higher-value ones.
Units valued in the lowest 25 per cent in Canberra are down 2.9 per cent from peak levels, compared with a 1.6 per cent decline across higher-value units.
The data showed the difference between unit value decline in the highest and lowest 25 per cent was widest in Melbourne and Sydney, at 4.9 and 4.5 per cent.
But Perth's unit market recorded larger declines than houses across every price point, while Adelaide's most expensive units fell further than its highest-value houses, Mr Burg said.
"Despite these exceptions, affordability has generally helped support demand for units and cushion value declines relative to detached housing," he said.
