Sydney property prices fall at slowest pace since peak

Signs are emerging that Sydney’s property downturn could be starting to slow as home prices stabilise.

Signs are emerging that Sydney’s property downturn could be starting to slow as home values stabilise across the country during spring.

Data from PropTrack shows Sydney property prices have dropped at the slowest rate in eight months as buyers and sellers get used to an environment of rising interest rates.

PropTrack’s October Home Price Index recorded a 0.21 per cent fall across all property types in Sydney October, bringing values down 5.82 per cent from last year and 6.28 per cent lower than the February peak.

Auction clearance rates have risen in Sydney.

The monthly fall was much lower than previous falls recorded from May to July, when prices dropped more than 1 per cent as interest rates started to climb.

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While it was too early to tell whether the downturn was coming to an end, PropTrack economist Eleanor Creagh said there were indications that consumer sentiment was “finding a floor” and that “we could avoid a return to those plus 1 per cent fall months.”

Prices have fallen more than 13 per cent year on year in the Northern Beaches.

“We’re approaching a place where sellers, after several months of price falls, are beginning to adapt to conditions and buyers are aware that interest rates are going to continue to rise,” Ms Creagh said.

Auction clearance rates had rebounded from the low level seen during the first rate hikes in the second quarter and the number of listings in Sydney was up above decade averages, representing more choice for buyers, she said.

Price movements in Sydney over the year to October 2022. Source: PropTrack.

“This year it’s not just the increase in borrowing costs that has changed, but also the increase in choice that buyers have in Sydney,” Ms Creagh said.

“There may be some buyers taking advantage of that increased choice and moving ahead with their purchasing plans.”

She said it was likely prices would continue to fall as interest rates rose but that the rate of decline may not be as fast as previously recorded.

“It’s probably too early to herald the end of the downturn,” she said.

PropTrack economist Eleanor Creagh.

Regions with the largest yearly price falls in October included the Northern Beaches, where the median property price fell 13.5 per cent to $1,944,000 and the city and inner south where the median dropped almost 9 per cent to $941,000.

The median property price in the Eastern suburbs fell 8.6 per cent to $1,460,000 while the North Sydney and Hornsby region fell 7.6 per cent to $1,438,000.

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