PropTrack Home Price Index: Sydney home price growth has slumped to its slowest rate in a year

Sydney home price growth has slumped to its lowest rate in a year, as affordability concerns put the brakes on an overheated property market.

Sydney home price growth has slumped to its lowest rate in a year, as affordability concerns put the brakes on an overheated property market.

According to realestate.com.au’s new PropTrack Home Price Index released on Thursday, Sydney recorded just 0.32 per cent growth across all dwellings in March, with the annual growth rate now at 16.27 per cent.

In regional NSW, that price growth was just 0.76 per cent, and an annual growth rate of 26.85 per cent.

“Sydney home price growth slowed in March to be around half of the decade-average monthly pace,” PropTrack Economist Paul Ryan said.

Auctioneer Peter Matthews, Sydney’s median dwelling price is now $982,000. Picture: Sam Ruttyn

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“Momentum in Sydney has been slowing for several months, with annual price growth now at the slowest pace since March 2021. This may be partly due to stretched affordability, with the median house in Sydney estimated to now be worth over $1.2 million.”

The slow down in price growth will come as a welcome relief to home buyers, but it is an improvement on February when Sydney property prices fell for the first time in 17 months (-0.1 per cent) amid the threat of rising interest rates and economic uncertainty.

Russia’s invasion of Ukraine and further cost of living pressures added to real estate market uncertainty in March.

The market slowdown will be welcomed by buyers. Picture: Julian Andrews.

However April may experience stronger price growth, with a number of auction ‘Super Saturdays’ expected after a significant number of properties were pulled from the market during March due to inclement weather.

Sydney’s median dwelling value now sits just under a million dollars at $982,000.

In the rest of NSW, the median dwelling value is now $658,000.

Across Australia home prices increased by 0.34 per cent – around half of the decade-average monthly pace of growth and substantially below the rate of growth this time last year.

Monthly price growth was highest in South Australia, with Adelaide the top performer of the capital cities. Prices fell very slightly in Melbourne (-0.02 per cent) in March, with larger falls recorded in Perth and the Northern Territory.

Regional areas continue to outperform the capitals in the post-pandemic market. Prices have increased 25 per cent in the past year in regional areas, but only 16 per cent in the capitals.

Over the past year, growth standouts have been Brisbane, regional NSW and the Australian Capital Territory, with regional Queensland also performing strongly.

“Home price growth has slowed considerably in 2022,” Mr Ryan said.

“The increase in prices across the country in March 2022 was at the slowest pace since May 2020, after national pandemic lockdowns.

“While price growth has slowed dramatically, it is comparing to an exceptional period – 2021 saw the fastest growth in over 30 years. In March, regional areas continued to benefit from relative affordability and preference shifts towards lifestyle locations.

“Regional areas in all states outperformed their capital city region. The slowing in price growth reflects the reduced influence of lower interest rates. Fixed mortgage rates have already increased over recent months and larger rises are expected as the RBA increases the cash rate – widely expected later in the year.

Sydney home price growth has slumped to its slowest rate in a year, as affordability concerns put the brakes on an overheated property market. Picture: Sam Ruttyn

“The outlook for price growth remains subdued, with the speed of official interest rate hikes the big unknown for the market in 2022.”

The PropTrack Home Price Index is Australia’s first monthly revised residential property price index providing timely and unique insights to help Australians make the most informed property decisions.

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