Sydney house price growth eases: ANZ Research
Jonathan ChancellorFebruary 6, 2021
GUEST OBSERVER
House price growth eased in September, led by the key Sydney market, which posted its weakest monthly result in two and a half years. Overall, the data are consistent with our view that the housing market is beginning to soften.
House prices were unchanged in Sydney in September in seasonally adjusted terms, ending a run of 1-2% monthly growth over the past year. This result is in line with the sharp fall in auction clearance rates in Sydney (Figure 1) as demand has eased somewhat and housing supply risen sharply.
This easing demand is supported by yesterday’s private credit data, which showed a further slowing in growth in investor housing credit. This suggests that APRA’s macro prudential measures (which have seen tighter borrowing conditions and higher interest rates for investors) are having the desired effect of containing investor borrowing and taking some heat out of the market.
Meanwhile, Melbourne house prices posted strong growth in September, up 1.2% m/m (seasonally adjusted). It appears that lower auction clearance rates have been slower to impact on house price growth in Melbourne compared with Sydney. But as this trend continues to unfold, we expect to see price growth in Melbourne ease over coming months.
Justin Fabo is senior economist, ANZ Research and Daniel Gradwell is economist, ANZ Research. Both can be contacted here.
Jonathan Chancellor
Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.