House prices in some of Sydney’s most desirable suburbs are falling, but a financial expert has revealed why the average buyer shouldn’t celebrate just yet.
Data from CoreLogic shows the home value index fell by around 1.3 per cent last quarter, with eight out of 10 of the fastest falling suburbs in the city’s east.
Little Bay has seen a decline of $263,455 in median home values over the past quarter – a drop of 8.8 percent – with the price now standing at $2.74 million.
Prices in Matraville, Randwick, Waverley and Kensington fell between 8.6 per cent and 7.2 per cent, removing an average of $269,764 in prizes.
Clovelly saw a quarterly change of 7.2 percent, with the median value dropping to $4.45 million.
Maroubra fell by $221,038, to an average value of $2.87 million.
The average Coogee home costs $4.21 million, down $296,688 from the previous quarter.
Cremorne and Terrey Hills rounded out the list with quarterly declines of about 6.1 percent.
Coogee, Randwick and Kensington were among Sydney’s fastest-declining suburbs as average home values in the city begin to fall
CoreLogic research head Eliza Owen said declines in home values tend to be driven by the most expensive parts of the housing market
CoreLogic research head Eliza Owen said price falls tend to be driven by the most expensive parts of a housing market.
For most potential buyers, the falling value of homes in expensive areas is likely to make little difference.
Data shows that the average household can only afford a home worth about $513,000.
Nationwide, only 15.5 percent of housing and unit markets have a median value that could be considered “affordable.”
Ms Owen said the declines could be attributed to higher-net-worth buyers feeling the pressure of high interest rates in the long term.
She said many may have boosted their budgets in the expectation that interest rates would fall sooner.
“Something had to be done and I think at this stage it is prices that have to give if interest rates don’t fall and incomes don’t rise substantially,” Ms Owen told the paper. Sydney Morning Herald.
The average house value in Melbourne has fallen by 1.7 per cent.
Prices in Brisbane, Adelaide and Perth continued to rise between 1 and 2.1 percent.
Sydney and Melbourne have both seen quarterly declines in home values, according to CoreLogic
Housing remains a hot issue among voters as speculation mounts over when Anthony Albanese will call the next election, with political commentators suggesting the Prime Minister is looking to April 12.
Experts have predicted that the Reserve Bank’s first official rate cut since 2020 will come in the early months of 2025.
Economists at the Commonwealth Bank think the first cut will come in February, but those at ANZ, NAB and Westpac are less optimistic about buyers.
They think the first cuts can only take place in May.
After the December meeting, Governor Michele Bullock emphasized that inflation is the bank’s main concern.
“Sustainably returning inflation to target within a reasonable time frame remains the board’s highest priority,” the statement after the meeting read.
The labor market plays a major role in the bank’s decision-making – while economic growth in the country has been slow, employment has been resilient.