In October 2020, Yarraville in Melbourne’s inner-west was named the fifth coolest neighbourhood in the world according to Timeout Magazine.
Yarraville was also the highest ranked “cool” suburb in Australia, ahead of tenth ranked Marrickville in Sydney.
Fast forward 18 months and Australia’s hottest housing market has gone stone cold, according the latest auction results from Domain:
A three-bedroom house in Yarraville that sold for $1.62 million in December, passed in at auction on Saturday on a bid of $1.405 million…
Bidding opened at $1.2 million and two parties made conservative offers before a vendor bid of $1.4 million was made. After one more bid, the property passed in for negotiation…
Agents said the frenzy of the market has slowed, with buyers shifting from FOMO (fear of missing out) to FOOP (fear of over-paying) at auctions over the Anzac Day long weekend.
The above is a scenario that is likely being played out across Sydney’s and Melbourne’s premium and trendier suburbs, given dwelling values across both cities are now falling:
Sydney and Melbourne house prices are now falling.
According to CoreLogic, price falls across Sydney and Melbourne in the three months to March 2022 were driven entirely by the top quartile of the market, where values declined by 0.2% (Sydney) and 0.4% (Melbourne):
Premium properties have driven price falls across Sydney and Melbourne.
Given Sydney and Melbourne are the most expensive capital city housing markets in the nation, they should be most sensitive to pending interest rate rises.
Therefore, expect prices to fall sharply in the year ahead as mortgage rates rise, with former “hot” suburbs like Yarraville leading the way.
