Sydney house prices down 9.5 percent from peak

Marco Green
December 5, 2018

CoreLogic November hedonic home value index results showed that Sydney's housing market is down 9.5%, which is on track to eclipse the previous record peak-to-trough downtrend seen during the last recession, when values fell 9.6% between 1989 and 1991.

Sydney house prices have eroded almost 10 per cent in a year and are on track for their worst 12 months on record as the national property market slumps to its weakest since the global financial crisis a decade ago.

"Nationally, dwelling values are down 4.2 per cent since peaking in October previous year, with dwelling values retracing back to levels last seen in December 2016", CoreLogic head of research Tim Lawless said. In Melbourne, house values fell by 1.2 per cent last month to be 7.3 per cent off since January.

Rental markets continue to be sluggish, with national rents up by only 0.7 per cent of the past 12 months.

Australia's housing market has taken another leg down, with Sydney, Melbourne and Perth continuing to lead the declines.

Mr Lawless said these trends were likely to be repeated in the short-to-medium term.

"I think any turnaround in the housing market is very much reliant on credit becoming a bit more available and, potentially, when we do start to see credit loosening up a little bit, that might be a sign that potentially monetary policy [interest rates] might be adjusted upwards as well".

But the situation is deteriorating even more quickly in the key Sydney and Melbourne markets.

The good news in light of this statistic is that Australia now has record lows when it comes to interest rates, with unemployment hovering around the 5% mark, and general economic growth occurring.

"We would expect that values in Melbourne would probably decline by at least 10 per cent as well" added Mr Lawless, adding that rental prices were forecast to grow at a significantly slower rate than in the past".

"From an economic perspective, GDP is tracking above expectations, unemployment is at the lowest level since 2012, population growth is strong and wage growth is slowly lifting from a low base".

However, unit values are now falling across more centres. Sydney's more expensive quarter of properties have recorded a 9.4 per cent drop in values over the past year while the most affordable quarter is down 5.7 per cent. Read it here or follow BusinessInsider Australia on Facebook.

Other reports by Click Lancashire

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