Sydney’s embattled property market may finally be bouncing back after consecutive rate cuts and better lending conditions eased buyer tensions, according to a leading property economist.
A quarterly report on prices by real estate classifieds firm Domain showed Sydney’s median house price fell by 0.4 per cent over the June quarter, compared to a 3.1 per cent fall in the prior three months.
The price decline in the harbour city was 9.1 per cent over a year.
But Domain economist Trent Wiltshire is forecasting a two per cent rise in Sydney house and unit prices over the next six months.
He said a number of factors, including the coalition’s surprise federal election win and the Reserve Bank’s back-to-back rate cuts, had helped stymie the rate at which Sydney’s property prices were falling.
“The coalition win helped stall house price falls after they promised not to change rules around negative gearing, plus the banking regulator has made some changes to lending rules,” Mr Wiltshire said.
“And the rate cuts in June and July has certainly given the market a boost.”
The Sydney housing market is currently 14 per cent below its mid-2017 peak.
Experts from Domain had projected the average Sydney house price could tumble below $1 million following the March quarter decline, but the median price at June 30 was still $1,032,338.
The Domain House Price Report found unit prices in Australia’s largest city were also down 7.1 per cent over the year to sit at $688,700, a level last recorded in the middle of 2015.
But the median Melbourne unit price increased by 2.0 per cent to $501,000 to sit just 2.0 per cent below their 2018 peak.
Overall, Melbourne – which has experienced its biggest downturn in property prices since the 1980s – prices rose 0.3 per cent in the June quarter to $818,200.
After a steady period of growth for Brisbane, the June quarter marked a downturn of 1.4 per cent to a median $559,200, while Perth fell down 2.0 per cent to $528,200.
Adelaide experienced only its second quarterly fall since 2014 with a 0.1 per cent decline, while Hobart’s property price boom could be ending after a 0.7 quarterly rise slowed the annual increase to 3.9 per cent – its lowest since 2016.
“Hobart had been going through a real boom, up 35 per cent in three years which is quite significant, but it looks like that boom could be coming to an end,” Mr Wiltshire said.