Whilst the down turn in high-end properties is one of the many contributing factors to Australia’s ongoing property slump, it’s proving to be a more favourable time for buyers.
With housing prices slumping during the last quarter, the weakness in the last three months has been concentrated at the top, higher end of the market, overriding the strong performance from less expensive homes and apartments. However, the slowing of the market is proving to be a boon for buyers, with more housing stock now on offer for cheaper prices.
Based on the CoreLogic stratified hedonic index, values across the most expensive quartile of capital city properties were down 1.5 per cent over the past three months while the least expensive quartile saw values hold firm according to CoreLogic’s Tim Lawless.
Similarly, over the past twelve months, the most expensive end of the market recorded a decline of 3.6 per cent, while the least expensive end of the market recorded a 1.4 per cent gain
The trends largely reflect recent declines in the Sydney and Melbourne markets where the upper quartile of property values fell by 7.3 per cent and 2.5 per cent respectively over the last 12 months.
The median home price across all Australian markets both city and regional is now $556,384. Sydney’s median home price is currently $870,554 down -4.5 per cent annually whilst Melbourne’s median price is $716,774. For June dwelling values for Sydney dropped -0.3 per cent, and dropped in Melbourne -0.4 per cent.
Real Estate Institute of NSW president Leanne Pilkington says in the last three months agents had found it more difficult to get buyers to make decisions about big purchases in the prestige market.
Twelve months ago, the buyers were really fueling the price growth because there was huge demand. However, they are not as willing to pay that premium right now, so the market is cooling.
Prestige properties are now more inclined to fall shy of their reserves, with more anxious vendors now settling for what is being offered. However that’s good news for sellers on the hunt for such a property, who may be able to nab a top notch home for less than expected.
“The market has definitely shifted,” says Jack Fontana from high end real estate agents Black Diamondz Property Concierge. “There are buyers but they’re cautious and picky. They’re looking for the suitable property, especially at that high end. It is not a two to three-year purchase for them but something that is long term. They want to make sure that the home is right and the position is right, and if it is a waterfront, a lot of them do want the private jetty.”
Whilst there were also monthly drops in Darwin (-1.1 per cent), Perth (-0.5 per cent) and Canberra (-0.3 per cent), elsewhere other cities had increases with Adelaide (0.3 per cent), Hobart (0.3 per cent), and Brisbane (0.2 per cent).
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