CoreLogic’s daily dwelling values index, which measures price growth across the five main Australian capital cities, rose by 0.05% in the week ended 21 April 2022:
However, Sydney recorded another fall, with values declining 0.10% over the week, which was more than offset by rises across the other major capitals:
Over the first three weeks of April, dwelling values have fallen by 0.19% in Sydney and by 0.05% in Melbourne. By contrast, the other major capitals have recorded strong growth, with values at the 5-city level also up by 0.22%:
Over the most recent quarter, Sydney (-0.5%) and Melbourne (-0.1%) have recorded falling dwelling values, whereas solid-to-strong growth has been recorded across the other major capitals, with values at the 5-city level up 1.0%:
The next chart plots the quarterly time series, with all major capitals past their peak of price growth and Sydney falling deeper into negative territory:
A key reason why Sydney’s (and to a lesser extent Melbourne’s) dwelling value growth is now falling is because the number of property listings has risen. By contrast, listings across the other major capitals (and indeed the regions) have tightened:
Given Sydney’s property market is the most expensive in Australia, it should be especially sensitive to interest rate rises. Accordingly, expect Sydney house prices to fall quite sharply as rates rise.
