Sydney and Melbourne market crashes with prices plunging by 4.2% in a year but Hobart is surging

Property prices have plunged in Sydney and Melbourne as national house and apartment values went backwards for the first time since 2012 – and it’s tipped to get worse.

Real estate data group Core Logic has revealed Sydney was the worst performing market during the past year, with property prices diving by 4.2 per cent.

In more bad news for home owners, national property prices have shrunk on an annual basis for the first time in six years as stricter lending rules scared off investors.

Property prices have plunged in Sydney (Oran Park pictured) and Melbourne as national house and apartment values went backwards for the first time since 2012 – and it’s tipped to get worse

Real estate data group Core Logic has revealed Sydney was the worst performing market during the past year, with property prices diving by 4.2 per cent

Real estate data group Core Logic has revealed Sydney was the worst performing market during the past year, with property prices diving by 4.2 per cent

Sydney and Melbourne, which together make up 60 per cent of Australia’s housing market, had a shocking three months, with house and unit prices shrinking by 0.9 per cent and 1.2 per cent, respectively.

However, one city is bucking the trend with Hobart property prices surging by 12.7 per cent during the past year as quarterly values climbed by 3.7 per cent in the three months to the end of May.

Core Logic’s head of research Tim Lawless said the Australian Prudential Regulation Authority’s restrictions on lending to investors had hit the Sydney and Melbourne markets the hardest.

‘The concentration of investment activity has been heavily skewed towards Sydney and Melbourne and it is these cities where market demand has fallen the most,’ he said.

In more bad news for home owners, national property prices have shrunk on an annual basis for the first time in six years as stricter lending rules scared off investors (Melbourne's Docklands pictured)

In more bad news for home owners, national property prices have shrunk on an annual basis for the first time in six years as stricter lending rules scared off investors (Melbourne’s Docklands pictured)

However, one city is bucking the trend with Hobart property prices surging by 12.7 per cent during the past year as quarterly values climbed by 3.7 per cent in the three months to late May

However, one city is bucking the trend with Hobart property prices surging by 12.7 per cent during the past year as quarterly values climbed by 3.7 per cent in the three months to late May

‘Subsequently both cities have experienced more substantial declines in property values.’

Mr Lawless said stamp duty exemptions for first-home buyers in New South Wales and Victoria had also failed to buoy slowing housing markets in Sydney and Melbourne.

‘The chances of a rebound in housing market conditions over coming months is unlikely,’ he said. 

Capital cities housing prices have fallen by 1.1 per cent during the past year however regional house and unit prices have done well, rising by 2.2 per cent in the 12 months to the end of May

Capital cities housing prices have fallen by 1.1 per cent during the past year however regional house and unit prices have done well, rising by 2.2 per cent in the 12 months to the end of May

Nationally, Darwin was Australia's worst performing market with house and unit prices falling by 7.9 per cent

Nationally, Darwin was Australia’s worst performing market with house and unit prices falling by 7.9 per cent

Perth also did badly, with housing prices falling by 1.8 per cent in the year to the end of May

Perth also did badly, with housing prices falling by 1.8 per cent in the year to the end of May

A high level of apartment construction, in the face of weak demand from Australian and foreign buyers, was also continuing to drag down prices, as supply increased. 

However, Mr Lawless said Australia’s historically high immigration rate of close to 200,000 a year and record low interest rates of 1.5 per cent would continue to help the slowing housing market.

Nationally, Darwin was Australia’s worst performing market with house and unit prices falling by 7.9 per cent, as Perth slipped by 1.8 per cent.

Capital cities housing prices have fallen by 1.1 per cent during the past year however regional house and unit prices have done well, rising by 2.2 per cent in the 12 months to the end of May. 

AUSTRALIA’S HOUSING MARKET

Sydney

Apartment prices fell 0.3 per cent in a year to a median price of $749,765

House prices slumped by 5.9 per cent annually to a median level of $1.020m 

Melbourne

Apartment prices rose 4.4 per cent in year to May 31 to median of $573,673

House prices increased by 1.5 per cent annually to a median of $821,006 

Brisbane

Apartment prices slipped by 0.3 per cent over the year to median of $385,211

House prices up by 1.2 per cent in 12 months to May to median of $536,286

Adelaide

Apartment prices down by 0.5 per cent in the year to a median of $328,878

House prices rose by 0.8 per cent to annually to a median value of $464,459 

 

 

 



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