Sydney and Melbourne property prices have gone backwards and are expected to slide in 2018.
Home values in Sydney shrunk by 0.9 per cent in December while Melbourne prices slipped by 0.2 per cent, marking the first monthly drop in the Victorian capital since February 2016, property data group Core Logic’s Home Values Index says.
Sydney still has a median house price of $1.058 million, which is more than double that of Perth and Adelaide and 27 per cent higher than Melbourne’s $832,735.
Sydney’s median house price of more than $1 million is only a fraction of this waterfront at Mona Vale, on the Northern Beaches, selling for between $7.3 million and $7.5 million
However, the harbour city’s annual real estate price growth pace has plummeted from a peak of 17 per cent in May last year to just 3.1 per cent at the end of 2017 – marking a 14 per cent turnaround.
Core Logic’s head of research Tim Lawless predicts Sydney will drag down the national housing market this year.
‘In 2018, the housing market performance is likely to be significantly different relative to previous years,’ he said.
‘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.’
Melbourne’s median house price of $832,735 is a tenth of what this Toorak house is valued at
Core Logic said a 20 per cent turnaround in property price growth was likely.
‘Previous downturns have seen the annual number of sales fall by around 20-25 per cent from peak to trough; considering the cyclical peak in transactional activity occurred over the twelve months ending August 2015,’ Mr Lawless said.
Units are still expensive in Sydney, with the median price of $774,124 significantly higher than the median price of a house in Brisbane, Adelaide, Perth, Canberra, Hobart of Darwin.
Darwin and Perth were the worst performing markets last year, with property prices falling annually by 6.5 per cent and 2.3 per cent respectively.
Darwin was the worst performing market with property prices plunging by 6.5 per cent (Fannie Bay house pictured)
Sydney is by far the more expensive market but property price growth is slowing down