Property Experts Say Sydney House Prices Will Drop This Year

Jeannie Matthews
January 13, 2018

Housing conditions have weakened nationally, and this is likely to continue in 2018, according to CoreLogic data.

"We're likely to see lower to negative growth rates across previously strong markets, more cautious buyers, and ongoing regulator vigilance of credit standards and investor activity", the Sydney Morning Herald reports Lawless as saying.

Home values in Melbourne fell for the first time since February 2016, with dwelling values slipping 0.2 per cent lower in December, but they were up 0.9 per cent over the quarter and 8.9 per cent for the year. "But, there are likely to be some variations between the capital cities, with Melbourne, Adelaide and Hobart prices staying in the moderately annual positive territory while Sydney, Brisbane, and Perth show modest falls", says CBA Senior Economist Michael Workman.

According to data released by CoreLogic this week, capital city unit prices rose by 5.1% past year on a weighted basis, topping a 4% increase in house prices over the same period.

The harbour city's dwelling prices retreated 0.9% in the month of December to be 2.1% lower over the quarter.

"Sydney's housing market has become the most significant drag on the headline growth figures", said Lawless.

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Melbourne prices also fell in December, while the cost of housing in Darwin crashed by 6.5 percent previous year. Its annual rate of growth is now tracking at just 3.1%; a stark difference to the recent cyclical peak when values were rising at the annual rate of 17.1% only seven months ago.

Mr Lawless believes the housing downturn is "entrenched, with values trending lower since May 2014".

"Our clearance rate will perhaps be in the mid to high 60s and I think if that is the case there will be another year of growth in 2018, but it's probably going to be in that range of single digits, 6-9 per cent, so another reasonably good year", he said. Since the 2014 peak, Darwin housing values have fallen by a cumulative 21.5 per cent.

"The substantial fall in values relative to rents has pushed Darwin rental yields to their highest level since July 2015 (5.9 per cent) and Darwin rental yields are the highest of any capital city", said Mr Lawless.

The market in the nation's second-biggest city is more resilient due to stronger population gains, a higher rate of jobs growth and better affordability, according to CoreLogic. For Aussies looking for affordable housing that's increasing in value, it may be time to look south.

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