Whilst prices in Australia’s biggest property market have limped along this year, March property figures reveal the market may soon be on the upswing.
In welcome news for investors and sellers, and not so great news for house hunters, price falls in Sydney are now beginning to slow indicating that the sluggish market may soon be on the rise again.
Prices took a tumble late last year and earlier this year, however CoreLogic’s hedonic home value index for March showed that price falls are no longer decreasing quite as fast.
Strong New South Wales migration levels are thought to be raising demand once more, which could mean a reinstating of price growth by the year’s end. The state’s population grew by a huge 123,000 people in September last year, thanks largely to the arrival of 98,782 migrants into NSW.
Additionally, whilst the tightening of credit policies in particular for investment loans has restricted investor movements, recent loosening of some of these policies should reinvigorate the market somewhat.
Throughout March the median Sydney home price fell by just 0.3 per cent. This was half the rate of decline for February and a third of January and December’s 0.9 per cent slump.
Whilst the cost of a typical Sydney home is still expensive compared to other parts of the country at $860,000, it is still down from the median price of $900,000 recorded over 2017.
Tim Lawless, CoreLogic’s head of research, says if the current trend continues the market may even see a return to growth in just a few months’ time. However, he emphasised that any return to the sky-high prices that Sydney saw in 2016 would be unlikely, and that any bounce back would most likely be “modest”.
Meanwhile, unit values in Sydney and Melbourne which are both experiencing housing pressures have remained strong. In Sydney unit values have increased 1.9 per cent over 12 months compared to house values slumping 3.8 per cent. In Melbourne unit values are a strong 6.6 per cent higher over the year compared to house values which are up by 4.9 per cent.
“This may indicate that people are increasingly wanting to live in units that are in city areas closer to their work, rather than opting to buy houses further out,” says State Custodians general manager Joanna Pretty. “It’s just one of the reasons why units continue to be a good investment choice in large cities.”
This may indicate that people are increasingly wanting to live in units that are in city areas closer to their work, rather than opting to buy houses further out.
It’s just one of the reasons why units continue to be a good investment choice in large cities.
Elsewhere two other capital city markets also had modest falls in March – namely Adelaide (-0.3 per cent) and Melbourne (-0.2 per cent). However other cities recorded increases in dwelling values – Hobart (1.7 per cent), Darwin (1.0 per cent), Perth (0.3 per cent), Canberra (0.2 per cent) and Brisbane (0.1 per cent).
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