Sydney house prices at 5.30 in their cycle and still falling: Experts

Larry SchlesingerDecember 8, 2020

According to RP Data, the decline in Sydney house prices sped up slightly in the second half of 2011, but the overall decline has been modest compared with the likes of Brisbane and Melbourne.

Michael Yardney, found of property advisory company Metropole, places Sydney’s housing market at between three and five o’clock – meaning it still has a way to go before it bottoms out.

“Different segments of the market are at different stages of the property cycle. The top end of the market is at three o’clock with an oversupply of property relative to the reduced demand,” he says.

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Time: 5.30

“There is more demand for properties in the middle and end of the market – but it is still weak – at five o’clock.  Overall, prices are likely to rise between 3% and 5% this year.”

SQM Research managing director Louis Christopher says Sydney is close to bottoming out.

“Stock levels are falling away fairly quickly. Clearance rates have been stronger than expected, and vacancies are super tight, with rents growing at 6% to 7% compounded annually,” he says.

According to Christopher, Sydney is already outperforming the rest of Australia in a downturn. He says the investor hotspots are the outer suburbs and western Sydney.

Property valuation firm WBP puts Sydney’s prestige housing market at five o’clock (not yet at the bottom of the cycle), but the affordable housing market at eleven o’clock (rising).

According to WBP, prestige housing has the potential to fall further should “GFC 2” happen, forcing asset sales in a lacklustre market.

“Capital growth in this segment has been stagnant for some time. Significant vendor discounting is required to achieve sales and avoid lengthy unsuccessful marketing periods,” says the valuer.

WBP says cheaper, existing housing well serviced by established infrastructure remains in demand.

Population: 4.57 million

Median house price: $516,000

House price growth in February 2012: 1%

Annual house price growth to December 2011: -0.9%

Annual house price growth to July 2011: -0.5%

Rental yield: 4.3% (Source: RP Data)

To find out where your capital city's house or unit market is on the property clock, download our free eBook.

Property Observer also tracks Sydney units on the property clock.

 

 

 

 


Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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