Money Sydney property prices tipped to fall 10 per cent in 2018

08:25  03 january  2018
08:25  03 january  2018 Source:   Sydney Morning Herald

Australian house prices look set to fall in 2018

  Australian house prices look set to fall in 2018 When it's all said and done, 2017 will be regarded as a year of two halves for Australia's broader housing market.The first, a period of rip-snorting price growth, especially in Australia's southeastern capitals, fueled by low-interest rates, strong population growth, lower-than-usual market turnover and an abundance of investor activity.

National property markets ended 2017 with a whimper, with half of Australia's capital cities recording falling house prices in December. Vision courtesy Seven News, Melbourne.

Sydney and Melbourne prices to fall in 2018 as housing market turns but a crash is ‘unlikely’. SYDNEY and Melbourne house prices have been tipped to fall by 5 to 10 per cent this year as Australia’s property cycle enters a downward phase.

Illustration: Dionne Gain© Provided by Sydney Morning Herald Illustration: Dionne Gain

Sydney property prices are tipped to pull back by up to 10 per cent over the next 12 to 18 months, experts warn, after real estate markets ended the year with a whimper.

The harbour city is leading the country's property downturn, with prices falling 0.9 per cent in December. Prices were down 2.1 per cent for the quarter, well below price growth of more than 17 per cent in mid-2017, said the head of research at property research data group CoreLogic, Tim Lawless.

Sydney property prices are now 2.2 per cent below the market's peak in August 2017.

The median house price in the harbour city is now $1,058,306, with a median apartment value of $774,124.

Comment: What 2018 has in store for interest rates and house prices

  Comment: What 2018 has in store for interest rates and house prices While the economy is expected to continue its gradual pick-up, it will be somewhat constrained until households begin to feel good again.

6 days ago Australian house prices look set to fall in 2018 Annual house price growth has more 6% nationally in 2018 with Sydney , the big property market 10 Apr 2017 Detached housing prices of 11 to 16 per cent price 17 Aug 2017 Market Economics' Stephen Koukoulas tipped a 2 per cent drop

A slowdown in Sydney house prices is likely to accelerate during the next two years, with economists predicting falls of 5 to 10 per cent in 2017 and 2018 . 6 Jul 2017 Brisbane is tipped to be the strongest property market in Australia in the next five or six years. 28 Apr 2017 SYDNEY 'S property

"Sydney's housing market has become the most significant drag on the headline growth figures," Mr Lawless said, with capital cities down 0.4 per cent on average over December.

The lacklustre results were expected to continue over 2018, which was "likely to be significantly different" to the boom cycle of the past few years, Mr Lawless warned.

"We're likely to see lower to negative growth rates across previously strong markets, more cautious buyers, and ongoing regulator vigilance of credit standards and investor activity," he said.

Almost every suburb in Sydney has seen a 50 percent increase in house prices in the last 5 years

  Almost every suburb in Sydney has seen a 50 percent increase in house prices in the last 5 years Nearly every suburb in Sydney and nearly half of all suburbs in Melbourne have posted median house price gains of more than 50 per cent since the start of the five-year housing boom in 2012, research by LJ Hooker shows. Australia's most expensive suburb Point Piper posted a 176 per cent increase in prices, while Llandilo, a growing western Sydney suburb had a 164 per cent increase. Other strong performing suburbs in Sydney include Clareville on the northern beaches, Gosford on the Central Coast and Galston in the northwest.Actual median prices in these areas stretch across a wide spectrum. Point Piper's median price is $12.

055m by June 2018 and . 10 . 9 per cent in Sydney and Darwin, while rising in Jun 22, 2017 It's crunch time for Australia's booming property markets. Looking from now to 2020, median housing prices are predicted to fall by 0. 25 Oct 2017 Adelaide, Canberra and Hobart are tipped to be the

A slowdown in Sydney house prices is likely to accelerate during the next two years, with economists predicting falls of 5 to 10 per cent in 2017 and 2018 . Read more 14 Mar 2017 AUSTRALIAS hot property markets are tipped to dip if interest rates rise in late 2018 , but experts predict Brisbane may

"There's going to be a negative growth rate, probably most similar to the 2000 to 2003 [time period] when prices fell by about 7 per cent."

Other experts are predicting declines for Sydney of between 3 and 10 per cent. Sydney recorded 3.1 per cent growth in the year to December 31.

Mr Lawless expected the market's slide from "peak to trough" to take 12 to 18 months. "The market peaked in August for Sydney, so we've already seen four months of the slowdown."

Joanne Seve, a Sydney lawyer and specialist in state-based taxes said the predicted market decline would be "really bad news for NSW revenue".

Transfer duties, including transactions of all kinds, amounted to slightly less than $1 billion in November, government statistics show. In the same month last year, they were worth $1.85 billion.

The state government itself, in a budget review mid-financial year, projected a near $650 million decline in stamp duty revenue.

House prices in Australia's capital cities are threatening 'negative growth' in 2018

  House prices in Australia's capital cities are threatening 'negative growth' in 2018 After starting in Sydney earlier in the year, Australia's housing market slowdown now appears to be spreading across Australia. After starting in Sydney earlier in the year, Australia's housing market slowdown now appears to be spreading across Australia.

Oct 19, 2017 Melbourne's property market is expected to climb between 7 to 12 per cent in 2018 , while Sydney is anticipated to soar between 4 and 8 per cent next year, SQM While a strong growth outlook for Sydney would come as a surprise for some after recent data found prices had fallen in

The strength of Australia's housing market through the recession surprised observers, who had 10 Mar 2016 A slowdown in Sydney house prices is likely to accelerate during the next two years, with economists predicting falls of 5 to 10 per cent in 2017 and 2018 .

On the slide: Sydney is leading the country's property downturn, with prices falling 0.9 per cent in December 2017.© Michel Bunn On the slide: Sydney is leading the country's property downturn, with prices falling 0.9 per cent in December 2017. But Ms Seve said the effect of a falling property market on the state's bottom line could be much greater.

"It will also affect future projections of land tax revenue in NSW [which are based on a three-year average]," she said.

Land tax is worth about $3 billion to the state and stamp duty nearly three times as much as Sydney's property market grows.

But the state government, which is fond of boasting of its $5-billion plus surplus, denied such a downturn was likely to affect the state's budget position.

"Thanks to our government's fiscal discipline, our strong financial position and our diversified economy, NSW is well positioned to deal with changes in market conditions," Finance Minister Victor Dominello said.

"Residential stamp duty revenues make up only 9 per cent of total revenues, with 91 per cent of revenue coming from other sources such as GST payments, Commonwealth grants and payroll tax."

Acting Opposition Leader Michael Daley accused the government of being dependent on Sydney's property market.

Property hotspots in 2018 as market conditions tipped to weaken

  Property hotspots in 2018 as market conditions tipped to weaken Why Hobart could be the next boom town.Tim Lawless, head of research at property data firm CoreLogic, believes that while the market will "gradually lose steam", it will still be active as the forces of demand and supply are still in play.

8%). The capital city residential property price indexes fell in Sydney (-1. 3 per cent in 2019. Lawless says prior to the GFC, big gains in Gold Coast property prices narrowed that gap to just 10 per cent .

Property experts expect up to 10 per cent house price growth by 2020. Property price falls for Sydney , Melbourne, Brisbane by 2020 How can prices be forecast to see only mild Lots of property investors are in it for the long Douglas Driscoll, chief executive officer of real estate group Starr

"Any significant downturn could be put the budget and public services at risk," he said.

"We have yet to hear of the government's plan B because it doesn't have one. "

With household debt at record highs, Mr Lawless expected to see regulators and policymakers encouraging home owners to reduce debt levels while interest rates were low, and warned that future borrowers, particularly investors, "may find securing a mortgage won't get any easier in 2018".

Relatively affordable regions, such as the Central Coast and the south-western suburbs of Sydney were better placed than the inner suburbs to hold their value due to interest from first-home buyers, he said.

"While the headline figures are set to weaken, below the surface the individual cities and regions of Australia will continue to operate under their own distinct cycles which are subject to more localised forces of demand and supply," Mr Lawless said.

High migration was likely to remain a key driver of housing demand.

Low interest rates and support for first-home buyers "are providing some support and should help ensure only moderate price falls," AMP Capital chief economist Shane Oliver said in a research note describing a crash as "unlikely".

He predicted Sydney prices would fall by about 5 per cent over 2018.

BIS Oxford Economics senior manager residential Angie Zigomanis expected prices could fall as much as 10 per cent in Sydney over the next two years in a "worst-case scenario" though said a 3 per cent decline over 2018 was more likely.

This was largely thanks to the restrictions placed on investors by the Australian Prudential Regulation Authority, putting a "handbrake" on these buyers.

"Investors are a big contributor to price growth in Sydney and this will stop them from paying the premiums they have in the past," he said.

The annual number of sales can drop by up to a quarter from peak to trough in a property cycle.

Flat week for capital city house prices .
Home values across Australia's five capital cities were flat in the week to January 7, but that's a 0.4 per cent fall on a monthly basis.Home values excluding auctions in the week to January 7 were steady as slight falls in Sydney and Perth offset a marginal gain in Brisbane, according to preliminary figures released Monday by property data group CoreLogic.

—   Share news in the SOC. Networks

Topical videos:

This is interesting!