- Sydney’s median home price fell 4.5% in the 12 months to June, the largest percentage decline on record dating back to 1980.
- With the exception of the central coast, prices fell in all other parts of the city.
- Inner-west locations suffered the largest declines over the year.
It’s been a tough 12 months for Sydney’s housing market, in stark contrast to what’s been seen in prior years.
The median price fell 4.5% to $870,554, the largest percentage decline on record for a calendar year, according to CoreLogic Research Analyst Cameron Kusher.
Only Darwin, with a decline of 7.7%, saw a larger decline over the year of any Australian capital.
However, while Darwin’s market is being impacted by the unwind of the mining investment boom, Sydney’s decline was driven instead by tighter lending standard which have had an especially large impact on the top end of the market.
As seen in the chart below posted by Kusher on Twitter, APRA’s restrictions on interest-only and highly-leveraged lending has left its mark on the Sydney market.
CoreLogicIt shows the nominal percentage growth in the 2017/18 financial year compared to the levels seen in the 12 months to June 2017.
With the exception of Central Coast, an area that many Sydneysiders don’t regard as actually being part of Sydney, prices fell in all parts of the city, be they in inner or outer ring.
Given the likelihood that lending restrictions will remain in place, limiting the amount potential buyers can borrow, many suspect that the declines in Sydney will last for some time yet, potentially seeing values fall by up to 15% from the cyclical peak in 2017.
Not everyone shares this view, but the vast majority do.
After stonking growth since early 2009, seeing Sydney’s median property price double, even if they don’t decline as much as some expect in the current downturn, it still looks like it’ll be a sluggish few years for Australia’s most expensive market.