Agents have observed a more cautious atmosphere at auctions, but good quality properties are still selling well. Picture: Sam Ruttyn
They’re still rising in most of the city but home prices have begun to fall in normally popular parts of Sydney as the threat of interest rate hikes weighs on buyer sentiment.
PropTrack data published Monday showed Greater Sydney home prices continued to rise over the past three months, but the rise was not ubiquitous and there were some markets that went backward.
City regions that defied a circa 1 per cent rise in values over the period included the Hills District, Ryde region and north shore, where prices fell on a quarterly basis.
The north shore had the biggest fall, with the median price of dwellings dropping 1.15 per cent. This represented an average fall of about $20,000.
Listing volumes remain tight in most of the city, but they have been easing in select areas. Picture: Max Mason-Hubers
The quarterly fall in Ryde was 0.94 per cent, while in the Hills District it was 0.51 per cent. Local agents in these regions have reported listing volumes and new development releases have been higher in recent months. This may have taken some pressure off buyers to bid up prices.
While not falling, growth was also muted in the eastern suburbs and northern beaches – where prices inched up by about half the rate of the city as a whole.
These regions were a contrast to Sydney’s cheapest regions, which generally recorded strong price rises.
Sydney’s fastest growing market over the three months to March, with growth of 1.6 per cent, was the southwest, which includes densely populated suburbs such as Liverpool and Fairfield.
The southwest was also the fastest growing market on an annual basis, with the median price of dwellings in the region surging by about 12 per cent.
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North Shore prices have dropped over the past three months. Picture: Sam Ruttyn
Greater Sydney’s median lifted by about 6 per cent over the same annual period, PropTrack data showed.
Other strong growth markets were the outer southwest, encompassing areas like Campbelltown, where quarterly growth was 1.55 per cent and annual growth nearly 10 per cent.
Inner west value rose 1.6 per cent over the three months, but coming off slower annual growth at about 5 per cent.
Dwelling values in The Central Coast, still one of the cheapest markets in the Greater Sydney area to buy a detached house, rose 1.2 per cent for the quarter and 7 per cent for the year.
REA Group economist Eleanor Creagh said there was a trend of more affordable areas outperforming the rest of the market.
She credited this trend to tighter homebuyer budgets and the First Home Guarantee Scheme, which is on offer for eligible buyers for purchases under $1.5m in Sydney.
Ms Creagh described the citywide 0.5 per cent monthly growth rate as “fairly strong” but cautioned that this run may face upcoming hurdles.
“We will see growth slowing, especially with another rate rise,” she said. “We can expect growth over the coming period to be slower and more uneven”.
Ms Creagh said any slowdown in values was unlikely to be as rapid as in 2022, the last time Australia started a rate hiking cycle, when prices dropped nationally.
“The Reserve Bank’s February rate rise will weigh on borrowing capacity at the margin, but tight labour market conditions, population inflows, investor activity and the expanded Home Guarantee Scheme have reinforced demand, with limited new housing supply providing a floor under prices.”
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