The news comes on the heels of CoreLogic announcing Sydney’s first dip in housing prices in over a year. In February, Sydney’s home value for all dwellings dropped just 0.1 per cent while all other capital cities had an increase.
“If CBA forecasts are realised, the median dwelling price in Sydney could fall by almost $150,000 by the end of 2023,” said RateCity research director Sally Tindall.
With the predicted drop of 3 per cent this year and 9 per cent next year, Sydney’s median house price of $1,410,128 (28 February) would drop to $1,213,686, and dwellings from $1,116,219 to $969,568.
Melbourne house prices would drop from $998,356 to $880,871, and dwellings from $799,756 to $701,842.AdvertisementAdvertisement
“This could be the beginning of the end for the current property price peak in Australia’s two biggest cities,” she said.
To temper home buyers’ anxiety over the shrinking equity of their homes due to the predicted increases, Ms Tindall said: “It’s worth looking at the bigger picture. Any property price drops will be coming off the back of monumental gains across the country over the last year and a half, which sent most homeowners’ equity skyrocketing.”
Acknowledging it can be stressful to buy a property at peak pricing ahead of a dip in the market, the research director has recommended owners “keep their head down and their mortgage repayments up”.
This way, “they should be able to ride out any dips”.
For first home buyers, a dip in prices could even spell an opportune time to break into the market. But, she advised this cohort to “crunch the numbers before they pop the champagne”.
Flagging that falling prices and rising rates could mean churning a lower deposit, Ms Tindall highlighted that it also means higher monthly repayments and lesser chances of getting access to credit.
All in all, “first home buyers should think carefully about overextending themselves in a market where rates are set to rise and prices are forecast to fall. Make sure you have a buffer to ride out any bumps.”
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Noemi is a journalist for Smart Property Investment and Real Estate Business. She has extensive experience writing for business, health, and education industries. Noemi is a contributing author of an abstract published by the American Public Health Association, and Best Practices in Emergency Pedagogical Methods in Germany. She shares ownership of the copyright of an instructional video for pharmacists when communicating with deaf patients. She attended De La Salle University where she obtained a double degree in Psychology and Marketing... Read more
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