Sydney and Melbourne property prices slowing but not yet at peak

Sydney and Melbourne property prices slowing but not yet at peak

5 May 2017

Both Sydney and Melbourne property markets are showing signs of cooling off and the trend could potentially be nationwide. Marty Silk of AAP writes that April saw the lowest rise in capital city prices in almost a year and a half.

CoreLogic director of research Tim Lawless said “The two hottest housing markets in the nation [Sydney and Melbourne] have shown signs of slowing down in April, with the CoreLogic Hedonic Home Value Index recording a rise of just 0.1 per cent over April, the lowest month-on-month rise in capital city dwelling values since December 2015.”

However Mr Lawless is not convinced that this result signals the end of the growth in property values. “We need to be cautious in calling a peak in the market after only one month of soft results,” he said.

Adelaide, Brisbane, and Darwin all reported modest rises in home prices, while Canberra and Perth both suffered slumps of more than 1%.

Nerida Conisbee, REA Group chief economist, says that New South Wales saw the biggest drop in buyer demand in Australia in April, driven by unaffordability cutting buyers out in Sydney.

“So are we finally at the peak? It’s unlikely in Sydney, but lower levels of demand means that price growth will moderate and April median national house price data suggests the market slowed considerably duringthe month.”

Seven News reported that agents in Sydney’s west say houses have been slower to sell. Real Estate agent Raj Bhandari said that homes which would have sold in a week or two are now taking four to six weeks. Seven reports that while prices have steadily risen by up to 70 % in 5 years, in April prices in Sydney actually dropped 0.1%.

Federal Treasurer Scott Morrison told the Australian Financial Review that regulatory controls on investor lending were taking effect, and that consequently the apartment market was already turning.