Across the nation property prices fell 0.3 per cent in January with Sydney leading the slump.
House prices in Sydney dropped by 0.9 per cent over January according to CoreLogic data. Prices in Australia’s largest property market have now slumped more than 3 per cent – a stark contrast to when prices surged around 75 per cent between February 2012 and the last peak in July last year. Meanwhile national property prices fell 0.3 per cent.
Australia’s second biggest city Melbourne also recorded a decline for the second straight month, albeit with a small fall of just 0.2 per cent. This was a marked change from the last quarter when Melbourne recorded an increase of 0.5 per cent in October.
Tim Lawless from CoreLogic says the downturns are a sign that Sydney and Melbourne, previously star performers over the last few years, are now set for slumps throughout 2018.
Mr Lawless says it’s clear that Sydney is now in a significant downturn and that any easing of this would not be seen in the next few months. He says Melbourne’s sluggish performance of late also marks an upcoming period of slow growth.
Dwelling approvals have also tumbled recently, with building approvals plummeting a big 20 per cent over December. The fall – down almost 40 per cent on the previous month - was due to the volatile apartment sector.
Approvals were down 19 per cent in Sydney, down 35 per cent in Melbourne and down 12 per cent in Adelaide.
The upside is that with investors now taking a step back and prices somewhat lower, first home buyers should find more opportunities to buy in the coming year. Competitive interest rates, fewer foreign investors, certain concessions and increased apartment stock in many areas should also ease conditions. However now, more than ever, discipline is needed.
“We do have a lot of discussions with first homebuyers about ways they can actually get into the market due to the size of deposits being prohibitive,” says State Custodians’ general manage Joanna Pretty. “We’ve been hearing for some time now that it’s all about giving up smashed avocados, but of course it isn’t that simple.
First homebuyers need to save up as much of a deposit as they can afford and take logical measures such as consolidating any expenses, making sure they know where their money is going with outlays, getting rid of any superfluous debts and getting rid of credit cards.
"With 2018 set to be a good opportunity to perhaps finally crack the market, these things need to be undertaken sooner rather than later before the market changes again."
Elsewhere, Perth prices eased 0.4 per cent in January, Hobart had a 1 per cent rise, Adelaide and Brisbane were steady and Darwin pegged at 0.2 per cent – down 6.4 per cent over 12 months.
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