The Australian property market is set for a shake-up. Most Australian cities have experienced a downturn, with Sydney and Melbourne leading the fall in property prices.
Property prices have peaked in most major Australian cities and have already fallen by 1.5% in Sydney, 1.8% in Melbourne, 0.1% in Brisbane, 0.6% in Darwin and 0.5% in Canberra.
AMP’s chief economist Shane Oliver believes prices in Sydney, Melbourne and Canberra could fall by 15-20%, while Brisbane and Adelaide could fall by 15%.
According to calculations by property data company CoreLogic, a 20% decline in Sydney house prices would take the market back to the prices seen in March 2017. For Melbourne, prices would be in line with those in November 2016.
CoreLogic’s research director Tim Lawless compared the rate of decline with the onset of the global financial crisis in 2008 and the sharp downswing of the early 1980s. He said the downturn in Sydney has been particularly accelerated, with the sharpest falls in almost 40 years.
“The boom is now well and truly over and the pace of decline in property prices is accelerating,” the AMP’s Shane Oliver said. “As Sydney saw amongst the strongest gains on the way up and became one of the most speculative and most indebted markets its now leading on the way down.”
As of 30 June 2022, the median house price in Sydney is $1.435 million – still an eye-watering figure for most Australian’s trying to break into the market. Buyer activity has cooled in recent months and there have been 15.3% fewer sales in the first half of this year compared to the same period in 2021.