Sydney's largest annual fall in house prices since 2008: Domain

House prices in Sydney fell 1.4% over the June quarter, dipping to a median of $1,144,217.

This is the second consecutive quarter of house price declines for the capital city, with the median dropping 4.5% year-on-year.

The move marks the largest annual fall in house prices since 2008, according to Domain.

Sydney unit prices fell to $737,080 over the June quarter, reflecting a 0.5% quarterly decline and a 3.5% annual drop.

The annual fall is the steepest drop in unit prices since 2006, Domain data analyst, Dr Nicola Powell said.

“Rising stock levels have continued to impact house and unit prices in Sydney as supply outweighs demand. With more choice and less urgency, there are fewer active buyers in the market, and those who are in the market are being restricted by tightening lending standards and the availability of credit.

“Indicators including lower clearance rates, heavier vendor discounting and days on market tracking higher all point towards a slowing market favouring buyers. House and unit prices are now back to values seen at the end of 2016.

“However these softening conditions are not uncommon when the median is high comparative to income and particularly when lenders are scrutinising loan-to-income ratios and overall living expenses, which is the case in Sydney,” said Powell.