Property Market Update: House Prices in Sydney over the Past 12 Months
According to one of the major credit rating firms, Australia might have to face the biggest price declines on properties this year. Prices have been in a decline for a good 18 months already but it looks like things aren’t stopping there. The country’s housing market has been in a downturn since 2017 and experts expect it to continue further this year.
According to CoreLogic, the price for a median housing in Sydney has fallen by 6.1% from mid-2017 to mid-2018. Experts believe there’s more to come and double-digit dips are to be expected this year. If you’re a homeowner who is waiting to sell or rent your unit, it’s possible that it will be at least around 2020 before you see any signs of recovery.
House prices in Sydney have dropped a massive average of $120,000 in value in the last 12 months, making a record as one of the sharpest property slumps the country has experienced since the 1980s recession. According to economists, the dwindling clearance rates and the reduced demand from investors and foreign buyers when supply is at a high contributed to further decline.
The Sutherland, Ryde, Hills District and Hawkesbury, Parramatta, and the Inner South West are some of the worst performing regions in Sydney, experiencing more than 10% decline in property value. Higher-priced houses suffer even greater declines with a discount amounting to more than 11% of their value from their 2017 prices.
But if you look at the overall picture, house prices in Sydney has been on a steady rise since the 1980s. From 2012 to 2017, Sydney has seen a 75% increase in housing prices. In Sydney alone, the median house price is valued at around $918,000 while apartments are at $710,000.
House prices might be falling for the past few years but no one can deny that they’re still costly and people are still having trouble purchasing one. According to the Housing Industry Association (HIA), the average price of a median dwelling in Sydney is more than 9 times the average annual household income.
Many people in Sydney, especially those who are in the 25-34 years of age, are worried about how they can afford their housing. They’re considering moving to another region where housing is cheaper and more affordable with their current income.
Although there’s still a long way to go before prices are deemed affordable enough for the average annual household income of families in Sydney, the recent declines present a silver lining to serious buyers who have cash on hand.
The property market may not be the optimal condition for those who want to make a profit from buying and selling houses. The bearish sentiment and uncertainty in the regulation of interest rates are driving off property investors who want to diversify their holdings. However, the recent declines are a blessing for first-time buyers who are looking into buying a property where they can live in for a long period of time.
Prices are still high when compared to the median salary, but they’re becoming increasingly attractive to serious buyers. So, if you’re looking to buy a property in Sydney, you might want to ready your savings and start looking around for a prospective purchase. This might be the year you’re looking for to get a bargain.