The first time in five years Sydney has seen a second quarter in a row a drop in the average house price. Sydney’s median house price now below the $1 million mark and over the March quarter the median house dropped 1.5 per cent to $995,804, with units also seeing a drop of 0.7 per cent to $656,166 according to data release on Thursday 21 April from the Domain Group’s March House Price Report.
This report came off the back of a fall of 3 per cent over the December quarter for house prices. Overall year on year growth remains positive as house prices remain at 6.9 per cent increased in value from the year before.
Sydney’s house prices hit its peak in September 2015 and are now around $50,000 lower now than they were back then. Dr Andrew Wilson who is the Chief Economist of Domain Group stated “It’s a hangover from the party of prices growth Sydney had over the past three years,”
When went onto to say “We’re entering a new environment of low and modest growth, but there’s no sign of a strong fall … Sydney is seeing a natural moderation of prices due to the de-camping of investors,”
The drop has been welcomed by some expert economist as positive and HSBC’s chief economist Paul Bloxham as house prices have risen “almost 50 per cent in five years”.
“If [the housing market] continued to run at double digit growth, there would be concerns about over-inflating the market. The pull back is a positive thing,” Mr Bloxham said.
“House prices will level out, but it will be a soft landing and we’re not expecting a big fall, we’ll see house prices steady, or falling back a little bit,” he said.
“In the apartment space there has been a lot of building and a big ramp up in Sydney and Brisbane, if there’s one area where you’ll see more weakness it will be the apartment space.”
With Sydney’s housing shortage expected to continue to at least 2020, building of new homes is expected to keep continuing in Sydney over the next few years
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