Sydney’s housing market has been a hot topic in the discussion of housing affordability for what seems like forever. Regarded as the centre of the housing affordability issue in Australia, Sydney’s market is one that has affected urban sprawl and development as well as the development of infrastructure and a future second airport.
The key trends in the market
Sydney recorded its first house price fall in more than a year in August, 2017. According to CoreLogic’s Home Value Index, prices in Sydney fell 0.1 per cent. Although the fall was recorded, it is no indication of a falling house market overall.
Rather, the fall is believed to be a reflection on the city’s growth in medium-to-high-density living where apartments and units are more affordable than detached houses.
Real Estate agent John McGrath predicts that the slowing Sydney market will lead to a levelling out of market values.
The Bank for International Settlements in Switzerland has analysed the price of real estate across 47 countries, focusing on the effect of interest rates on property prices. The report found that Australia sustained the longest term of price growth which lasted 55 years.
From 1961 to 2016, Australian house prices have grown on average 8.1 per cent per year. This was one of the highest growth rates of all the developed nations.
In October 2017, CoreLogic also reported a fall in Sydney’s auction rates indicating that the market could be readying to turn in the next year. Economist Dr Shane Oliver predicts that both Sydney and Melbourne’s housing markets have passed their prime and will slow down in the next two years while markets in Adelaide, Brisbane and Canberra continue to grow.