Experts predict end to Sydney’s property boom as housing prices cool
Article by Kirsty Timsans
Homebuyers may be able to breathe a sigh of relief as new data suggests that Sydney’s property boom appears to be over.
The Domain Group House Price Report for the September quarter found that Sydney house prices grew by 3.2% to a median house price of $1,032,422, the slowest rate of growth since March 2014.
A similar decline was reported for unit values which increased by just 1.5% to $673,182, compared to a 7.4% growth rate in the June quarter.
Domain Group senior economist Andrew Wilson said the introduction of capital mortgage requirements by APRA earlier this year has helped cool the market.
“Nothing will slow a market more than higher interest rates and the enthusiasm of a bullish market has now started to wane,” he said.
According to AMP Capital chief economist Shane Oliver, Sydney is now in the early days of a low-growth period, with single digit increases in housing prices expected in going forward.
“This gives buyers more time to assess the market and make better decisions,” he said.
Century 21 Australia chairman Charles Tarbey said the slowdown was predicted up to six months ago before the RBA gave the market “an added spurt” with an interest rate cut.
However not all experts are convinced as St. George senior economist Hans Kunnen said tight vacancy rates, a consistent undersupply, population growth and a strong economy means the boom is all but over.
“On the demand side it’s still firm and supply hasn’t kept up,” he said.
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