Sydney’s housing prices have dropped
Sydney’s housing prices have dropped 3.1% in the last quarter, marking the first quarterly drop in over three years. This should come as no surprise considering that since June 2012, the prices rose by 52.6%, with 14.8% of this in the last year alone, leaving Sydney ranked as the second least affordable city in the world. With this price drop, it is expected that the median price could drop to just below $1 million by June, which would be beneficial to first home buyers, and to families looking to upgrade. Apartment prices also dropped 2.8% in the December quarter, marking the first fall since March 2013.
While these price falls are beneficial to some aspects of the economy, it will be more difficult for investors to attain loans due to rising interest rates. As well as this, the NSW government forecast stamp duty cash to grow to $8.6 billion by 2018/19, and this price fall may have implications on that.
With all this in mind, it is important to note that there has been no prediction of the housing prices in Sydney to completely crash, with senior economist Dr Andrew Wilson estimating a 2% growth over the next year with a potential price fall in the next six months.
It is important to note that while the housing prices in Sydney have dropped overall, this is not true for the Western suburbs whom saw a 1.8% increase along with the Blue Mountains. The Central Coast also saw a 2% increase in the average price of houses.
COMPARISON WITH OTHER AUSTRALIAN CAPITAL CITIES
The prices experienced by Sydney do not necessarily follow other Australian capital cities, with some regions experiencing growth. Melbourne saw a house price leap of 14.5% in the last year, however, this fell 2.8% by September, and in the last quarter saw an additional 1.8% drop. Darwin and Perth both experiences price drops of 2% and 0.8% respectively in the last quarter.
Canberra however saw its largest annual price growth, 9%, since 2009. This increase in housing prices followed Sydney and Melbourne in the strongest performing capital cities in the past year. In the last quarter, they saw a price increase of 4.1%. Hobart also grew in the last quarter by 7.9%. Brisbane recorded an average house price increase of 1.5%, however this is following a 15 year low on apartment pricing.