Residz Team 3 min read
It’s no longer a seller’s market in Australia’s most expensive city. That much is true.
The latest Domain House Price Report shows Sydney recorded its steepest ever annual house price declines over the past 12 months.
But, the report shows houses still cost 24.2% more today than they did pre-pandemic. In other words, if you’ve owned your property for many years, you’re probably still going to do well if you sell in this so-called buyer’s market.
House prices well off their peak
Yes, the sharp decrease is especially deep. But it is a sharp decrease off the peak of the market. The price report says that house prices in Sydney are 11.3% below the housing value peak in March last year.
In those heady days vendors were well-rewarded. Back then, the median house price was almost $1.6 million. The new median price is about $1.41 million, a huge amount of money to pay for a home and no doubt continuing to home buyer stress.
Prices no longer dropping as quickly
The report shows “the peak rate of the quarterly decline has passed.” In Sydney, house prices in the December quarter were falling three times slower than they were the previous quarter.
Commenting on the state of property prices nationally, Dr Nicola Powell, Domain Chief of Research and Economics said:
“The spring selling season bore the brunt of interest rate shocks and sky-high inflation levels. This is why the September quarter saw house prices fall at their fastest quarterly rate.
Sellers had been sitting on the sidelines to see how the housing market downturn unravelled and how high inflation and interest rates would land. The low flow of new homes coming on the market throughout spring and early summer has kept overall supply limited despite a drop in the number of sales. This tight supply is helping to keep prices stable.”
Units continue to fall
Unit prices continued to fall over the December quarter (albeit two times slower compared to the previous quarter) and the pace of decline is still more moderate than houses. The report shows that units are 6.5% lower than the 2021 peak, making unit prices lower than in March 2020.
Units only lifted 8.9% during the pandemic real estate boom compared with a 40.1% lift in house prices.
Report shows regional towns increasingly for the rich
So, is the solution for house buyers a tree-change or sea-change?
Regional NSW still remains relatively affordable, but it’s interesting to note in the report that 9 of the 10 NSW regional towns listed now have a median price over $520,000. Compare this to December 2017 when only 2 out of the 10 regional towns had a median price over $520,000.
Of the list, only Broken Hill could be considered very affordable, with a median price of $181,250.
And not a single town or city from the list of Albury, Armidale regional, Ballina, Bathurst regional, Bega Valley, Bellingen, Broken Hill, Byron, Cessnock, and Clarence Valley had a median price over $1 million back in December 2017.
Now, both Ballina and Byron have median prices over $1 million and Bega Valley and Bellingen are edging ever closer at $830,000 and $800,000 respectively.
As Knight Frank’s Head of Residential Research Michelle Ciesielski noted in March 2022:
“Ultra-wealthy Australians are transferring their wealth back to the cities whilst also investing in second homes. The use of second homes for longer periods was supercharged in 2021 as flexible working grew and homeowners looked to decamp for periods of time.”
So, is it a buyer’s market? Yes it is, if you compare it to buying in the frenzy that was 2021-2022, but Sydney housing remains ‘severely unaffordable’ for most and NSW regional isn’t the low-cost option it once was for them either.
Residz can help buyers and sellers reduce the stress:
Photo by Jamie Davies on Unsplash