Sydney Harbour Photo: Wikimedia Commons
Sydney’s hot housing market is swinging back in favour of buyers, as demand remains high, but prices are staying flat.
Property values have soared by 16.7 per cent over the past 12 months and are 49.6 per cent higher over the growth cycle to date. As a result, some have voiced concerns that foreign investment in the city’s market have helped to price out local buyers, due to limited supply. Now, though, property prices are flattening, according to the latest CoreLogic RP Data.
The report shows that values in Sydney edged up by just 0.1 per cent in September 2015.
“The slower month-on-month reading across the Sydney market comes at a time when auction clearance rates have slipped to the low 70 per cent range from week-to-week and the number of advertised properties has risen. Vendors are still enjoying strong selling conditions, but it looks like buyers are slowly regaining some leverage in what has been a very hot market,” says CoreLogic’s head of research, Tim Lawless.
Across the capital cities, the month-on-month results ranged from a 2.4 per cent rise in Melbourne dwelling values, through to a 1.9 per cent fall in values across the Hobart market.
During the September quarter, half of Australia’s capital cities posted a decline in dwelling values with Hobart down 2.0 per cent over the three months. Adelaide values slipped by 1.6 per cent, Perth by 0.7 per cent, and Canberra values were down 0.4 per cent. The most substantial capital gains over the quarter were achieved in Melbourne where dwelling values were up by 7.4 per cent, followed by Sydney (4.6 per cent), Brisbane (1.9 per cent) and Darwin, where values were up by 0.4 per cent.
“Weakening labour markets, slower population growth and less demand for housing is placing downwards pressure on prices to differing degrees across these markets,” Mr Lawless said.
Overall, capital city prices increased 0.9 per cent month-on-month and 4 per cent quarter-on-quarter.
Lawless notes that the upper end of the market is where growth has been the most substantial: the top quartile of dwellings based on value has recorded growth of 12.3 per cent over the past 12 months, while the most affordable end of the market has recorded a lower growth rate of 8.5 per cent.
“This trend holds true across Sydney and Melbourne,” comments Lawless, “however in Brisbane, Adelaide and Perth it is actually the most affordable end of the housing market that has recorded the best results.”