Sydney property prices down 10% since February

Sydney harbour.

Six consecutive months of interest rate hikes have taken a heavy toll on the Australian property market, with Sydney home values falling by 10.1% — the equivalent of $116,500 — since hitting their peak in February this year.

According to property research firm CoreLogic, Sydney is leading all major Australian markets in the current downturn, after having recorded the steepest price rises over the recent growth cycle.

“Although Sydney’s housing values were already in decline when the rate hiking cycle began, the pace of decline accelerated sharply following the first interest rate increase in May,” said Corelogic research director Tim Lawless.

“Sydney values are now down -9.5% since 3 May, and -10.1% since peaking on 13 February this year.”

With its eye-watering prices and typically larger average mortgage size required to enter the market, Sydney is arguably much more vulnerable to rate hikes than other capital cities.

And with most economists pencilling at least one more cash rate hike this tightening cycle, property prices still have room to fall further as reduced borrowing capacity takes a bite out of demand.

So far, however, the recent drop in prices hasn’t been enough to undo the gains recorded over the pandemic period, which lifted Sydney dwelling values by 27.9% — or roughly $252,900 — from trough to peak.

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According to Lawless, Sydney prices would have to fall by another 11.4% to return to their pre-COVID levels.

“The good news for Sydney home owners is that the rate of decline has continued to moderate through October, improving from a -2.2% decline over the four-week period ending 3 September to -1.3% over the most recent four-week period ending 23 October,” lawless said.

Across other major markets, CoreLogic’s daily home value index shows Melbourne prices have fallen by -6.4% since 14 January while Brisbane prices are down -6.1% since peaking on 19 June.

In Hobart and Canberra, home values have fallen by -4.7% and -4.4%, respectively. Adelaide and Perth have proven to be quite resilient in contrast, with prices in both cities dropping by less than -1% since their August peaks.

Among capital cities, only Darwin hasn’t seen housing values begin to trend lower, though CoreLogic points out that prices in the Northern Territory capital remain -10.1% below its record high in 2014.

For more information on property and lending trends, head over to our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

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