Sydney house prices have fallen by 0.2 per cent over the past four weeks, reversing the small gain recorded during January amid a surge in listings and weakening demand from buyers, CoreLogic data shows.
The rolling 28-day change in the CoreLogic daily index shows Sydney prices slipped into negative territory on February 19 for the first time since October 2020.
Sydney house prices are on track to record the first monthly drop during February amid surging listings and falling demand.
With only six days left in the month, Sydney is on track to post its first monthly drop in prices since the market last bottomed out in September 2020, said Tim Lawless, CoreLogic’s research director.
“The downward trend in our measure of Sydney home values is relatively mild, but it looks to have some momentum based on daily data updates,” he said.
“It’s likely we will be reporting the first month-on-month decline in Sydney’s home value index since September 2020.
“It’s certainly not showing evidence that the market is crashing, it’s probably best described as a levelling out in price, similar to what we’re seeing in Melbourne.”
Mr Lawless said sales evidence indicated the softening in growth that emerged last April and gathered pace late last year, has returned.
“I think the bounce back in January was more a reflection of volatility due to thin trade and seasonality, more than anything. But with more stock being added to the market, the market seems to be losing steam more sharply,” he said.
Rising supply
“It’s almost as if the February numbers are rejoining that sharp downward trend we’ve seen in Sydney through the final quarter of 2021.”
New listings in Sydney jumped 14.1 per cent over the year, while Melbourne rose 21.8 per cent. Nationally, new listings jumped 17.3 per cent.
AMP Capital chief economist Shane Oliver said the drop in the CoreLogic daily index for Sydney came earlier than he expected.
“I was expecting Sydney prices to peak in the second half of the year, but it looks like we may have seen the top of the market, if not, we’re getting really close to it,” he said.
“The strength we saw in the auction clearance rate in January surprised me because house price data has gone in the opposite direction. I think a combination of higher mortgage rates and worsening affordability are now visibly taking their toll.”
Mr Lawless said the weakening trend in prices was likely to continue as more stock is pushed onto the market through to Easter.
“One of the best leading indicators – the comparative market analysis generated by real estate agents on CoreLogic’s RP Data portal when they prepare properties for sale – had risen by 23 per cent over the year and 45 per cent higher than 2020,” he said.
“So we’re definitely seeing real estate agents much more active, which implies that the new listings trend is going to be more substantial than what we saw last year or the year before that.
“This is great news for buyers because it means they have more choices and maybe can even negotiate a little bit harder. But it should also translate to a softening in price pressures.”
Melbourne is also showing a similar softening trend, with CoreLogic’s daily index reading showing no change over the past four weeks after a small 0.2 per cent price gain during January.
Perth is only recording subtle growth, up 0.2 per cent over the rolling four-week measures, while housing values continue to record higher gains in Brisbane and Adelaide, which were up by 2.1 per cent and 1.6 per cent respectively over the 28 days ending February 22.
Auction clearance rates are likely to fall, but even a drop from recent inflated numbers would still permit a healthy market, agents say.
“The recent trends highlight the increased diversity evident across Australia’s housing markets. The multi-speed conditions reflect differences in factors such as housing affordability, advertised inventory levels and demographic shifts.”
https://www.afr.com/property/residential/sydney-house-prices…
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