Sydney is nearing a double-digit housing price decline, with Cotality’s daily dwelling values index recording a 9.3% fall since the market peak on 19 March:
The trend in value growth has also turned down, with values declining by 1.4% over the past 28 days:
Louis Christopher, founder and managing director of SQM Research, says Sydney’s final auction clearance rate fell to just 27.1% last week, effectively the lowest on record outside the COVID-19 pandemic.
As a result, Christopher noted on X (Twitter) that “100% Sydney housing prices will be now falling at an accelerated rate compared to just two month ago”.
Christopher’s view makes sense in light of the Reserve Bank’s recent rate hike, the fourth of the year.
Sydney is easily the most unaffordable housing market in the nation, with the typical mortgage in NSW consuming 30.7% of household income:
As a result, Sydneysiders’ mega-mortgages make them the most sensitive to rate hikes.
Spare a thought for first home buyers enticed into the market by the Albanese government’s 5% deposit scheme, introduced last October.
As illustrated in the table below, more than 28,000 first home buyers in NSW have utilised the scheme:
With Sydney home prices down nearly double digits and more to come, plus four rate hikes this year and the expectation of another, many are facing negative equity and extreme mortgage stress.
