There are signs that real estate prices may fall, as some parts of Australia have already seen significant value declines.
Home prices in some suburbs of Sydney have fallen by a whopping $ 190,000 in the last three months as more experts warn that Australian home prices will fall. According to CoreLogic, the suburbs of Beaconsfield’s city center suffered the biggest slump in the country, with home prices plummeting 9.2%. So, three months ago, it was worth less than $ 162,662. In the popular New Town Inner West suburbs, home prices have fallen by $ 120,207 over the past three months, with a significant 6.6% drop to a normal value of $ 1.82 million. Surry Hills posted a loss of $ 134,054, prices fell 6.1% to $ 2.19 million, and Birchgrove on the outskirts of the waterfront fell 6% ($190,581) to $1.82 million.
Two suburbs of Victoria are also suffering from pricing issues, with South Yarra down 5.2% to $ 2.16 million and Tourac down 4.7% to $ 4.35 million. The biggest loser in the housing market was Barangaroo, a suburb of Sydney, where prices fell 8.5% to $ 2.29 million, followed by Melbourne’s Box Hill, down 5%. Eliza Owen, Research Director at CoreLogic, said the premium segment of the market is more vulnerable to price declines, but significant increases in value are also impacting demand. “Affordable price constraints, tighter credit terms, higher fixed rates are probably enough to cool the premium market, and the sharp decline is the very sharp rise in market top-end volatility and price increases. I think it’s related to the rise, “she told the Australian Financial Review.
“I think it’s a reflection of how strong the upswing in the more expensive central markets has been.”
Experts have warned that available buyers have also been reduced as people struggled to afford the huge house prices after the market went nuts during the pandemic.
Instead of the premium market, it was Sydney’s outer suburbs that recorded healthy price gains in the past three months.
The western suburb of Silverdale saw house prices shoot up by 6.9 per cent to $1.13 million, while Camden South rose by 6.3 per cent to $976,137.
But it was Queensland where the biggest price increases were found with the rural area of Kooralbyn surging a huge 14.9 per cent to $563,389 and Logan Central soaring by 14.3 per cent to $435,811.
In potential bad news for first home buyers, Ms Owen predicted the affordable end of the market would see the biggest increase in prices, including in Sydney, Melbourne and regional areas.
“This is because more affordable segments tend to have less volatility in growth rates – the highs are not as high, but the lows are not as low,” she said.
Real estate prices across Australia are expected to stagnate by May, fall by the end of December, and then drop dramatically in the years to come, according to Westpac. Banks predict in the latest report that Australian home prices will fall 7% in 2023 and another 5% in 2024. Typical Sydney home prices have risen 23% over the past year, but are now forecast for a pull back. A federal bank analysis found that it could fall by nearly $ 200,000 by the end of 2023.