Sydney's once-booming suburbs show a slight stutter

Sydney's once-booming suburbs show a slight stutter
Sydney's once-booming suburbs show a slight stutter

Sydney’s booming property market may be finally taking a breather from the scorching pace it has grown over the last few years.

The clearest indication comes from a slowdown in suburbs that were once hotbeds of investor activity. 

Although property prices continue to grow across the Harbour City, the rate of growth is slowing most significantly in the west and south-west regions, Domain News reported citing new data.

AMP Capital chief economist Shane Oliver said slowing growth in these regions was “a canary in the coal mine in the sense [APRA] measures and a supply surge is starting to bite”.

“We saw this back in 2005, the west and south-west declines followed through to the inner west,” Dr Oliver said.

“And then it starts to show up in the north and east.

Clearance rates are also starting to slow, with a 67.1 percent rate over the Queen’s Birthday long weekend, a sign that the boom may be coming to an end.  

“The debate now is whether prices will fall or whether there is a deceleration this year with price falls next year,” Oliver was cited as saying by Domain.

Growth in asking prices – an indicator of price growth in the real time private treaty market – has started to slow in recent months. In the year to May 2017, asking prices in the south-west were up 2.3 percent, compared to the 11.9 percent growth experienced the year before.

This was the slowest annual growth since the boom began.

The western suburbs saw a similar pattern too, with 5.7 percent growth to May 2017 compared to 12.3 percent the year before. 

In these areas there is now a “rush to market”, Domain Group chief economist Andrew Wilson noted.

In the west and south-west regions, the number of auctions rose 50 percent and 75 percent respectively in May 2017 compared to a year before. 

“We typically see more sellers at the end of a boom,” Dr Wilson said.

But this has yet to be felt in other areas, where asking prices grew more than 8 per cent, with four areas in double figures.

In the inner west, growth was 11.9 percent over the year to May 2017.

Sydney’s rental yields are now the lowest in the country, at 3.31 percent for houses and 3.99 percent for apartments. This compares to a national average 4.42 percent for houses and 5.01 percent for apartments.

Tags: 
Sydney Slowdown

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