Sydney property capital growth to lose steam: CoreLogic RP Data
Capital growth gains for Sydney are predicted to loose their steam within this financial year with affordability, a stable rent environment and tighter lender financing conditions expected to slow the market.
In releasing the CoreLogic RP Data Hedonic Home Value Index, CoreLogic research head Tim Lawless said it looks likely that the pace of capital gains will remain higher than rental growth which will push rental yields even lower over the coming months.
“In the absence of a trigger event, such as a sharp rise in the jobless rate, higher interest rates or an external shock, it is unlikely we will experience a significant correction in dwelling values. However, the longer this run of growth continues across our largest capital cities, the more susceptible the housing market becomes to changes in the economy or broadly across household finance,” Mr Lawless said.
"It is difficult to imagine Sydney maintaining such a rapid pace of capital gains.
“Not only is affordability becoming a challenge for many sectors of the market, but yields are substantially compressed, rents are hardly moving and investors are facing tighter financing conditions from lenders."
