Aussie suburbs where home prices are set to crash

Homes in some Aussie suburbs will be worth as much as $200k less than they are now if current trends continue, experts have revealed.

Home prices are expected to become cheaper over the coming years in many of Australia’s high-rise precincts and emerging apartment development zones.

Exclusive price modelling has revealed property values in the worst affected areas could be more than $70,000 lower than they are now by the year 2029 if their recent downward trajectory continues.

Most of the markets where prices were on track to fall over the next five years were in Sydney and Melbourne, but there was also a pocket of inner Brisbane likely to be affected.

Many of these areas had a high supply of apartments available for sale, while declining rental yields were turning off investors – normally a strong buyer market for these types of properties.

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Low supply and high demand has been the prevailing trend for detached houses, but conditions for unit sales in high-rise areas are different. Picture: David Swift

They tended to be located within inner city areas, according to the modelling of PropTrack data.

It comes as property figures published this week showed one of the biggest increases in listings ahead of the traditional spring selling season – most notably in our two biggest capitals.

Sydney recorded its biggest rise in August listings since SQM Research records began in 2009, while the volume of Melbourne listings was well up on long-term trend.

The listings increase was so high SQM Research director Louis Christopher declared Melbourne, and to a lesser extent Sydney, had become “buyer’s markets”.

He said vendors in both cities would need to be open to negotiation on price, especially if their homes had attributes that could be considered drawbacks.

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A unit in this Haymarket building in Sydney sold for less than the vendor paid.

Those selling detached houses in prime locations would still be in a strong position but those with properties offering less scarcity value – often units – would be in a weaker position, Mr Christopher said.

He noted that conditions varied considerably across individual suburbs and the weaker sales environment would not apply everywhere or across all housing categories.

SYDNEY SUBURBS WHERE HOME PRICES ARE SET TO CRASH

Modelling from research group PropTrack, which measured what prices would be if growth trends from the last five years continued, showed inner Sydney suburb Haymarket would record one of the biggest price drops.

Prices for dwellings in the suburb – nearly all of which are units – fell an average of 22 per cent since 2019 to hit a median of $925,000 this year. The median price would fall $200,000 to $725,000 by 2029 if this trend continued.

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Suburbs such Docklands in Melbourne have a very high supply of new units.

Epping in Sydney’s northwest – another significant unit market – would record a $144,000 average drop in prices if trends from the last five years were repeated.

For more Sydney suburbs, where prices are set to fall see table below.

MELBOURNE SUBURBS WHERE HOME PRICES ARE SET TO CRASH

Some of Melbourne’s biggest price falls would be in inner suburbs Balaclava, Carlton and Carlton North, where prices would fall by about $78,000-$83,000 over the five-year period.

Falls would also be recorded in:

Flemington (-$66,000)

Docklands (-$36,000)

and the Melbourne CBD (-$46,000).

BRISBANE SUBURBS WHERE HOME PRICES ARE SET TO CRASH

Declines in property values were rare across Brisbane, but inner suburb Milton would be a notable exception, with prices dropping $35,000 by 2029 if the current price trajectory continued.

PropTrack economist Paul Ryan cautioned that these were not exact forecasts but more an “exercise” in what could happen in many markets if they continued on their current course.

Haymarket would have one of the biggest price falls in the country is recent trends continued.

Mr Ryan added that past performance, while often having a strong influence on markets, was not always a predictor of future performance.

Some markets where prices were falling could hit a point where they become a lot more attractive for buyers, which in turn, would offset any further drops in values.

Digital Finance Analytics director Martin North said price falls were a growing risk for many areas the longer interest rates were kept at current levels.

“People are running down their savings and there are now early signs of distress in much of the market,” he said, adding that there would be many homeowners forced to sell if rates stayed high.

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Sydney just had its biggest August month for new listings on record. Picture: Gaye Gerard

“It’s worth thinking of the structure of the market,” he said. “A third of people have no mortgage and are doing well, another third rent and another third have a mortgage and they’re struggling.

“The pressure is not equally spread across households. There is building evidence that people are getting into difficulty and more property investors will be selling because they can’t make their investments work.”

AUSSIE SUBURBS WHERE HOMES WILL COST LESS BY 2029

Suburb	Total price drop over 5 years
Haymarket NSW	-$200,000
Lewisham NSW	-$177,000
Epping NSW	-$144,000
Edgecliff NSW	-$132,000
Sydney Olympic Park NSW	-$95,000
Rouse Hill NSW	-$85,000
Balaclava VIC	-$83,000
Carlton North VIC	-$79,000
Carlton VIC	-$78,000
Flemington VIC	-$66,000
Gladesville NSW	-$50,000
Hurstville NSW	-$49,000
Chippendale NSW	-$46,000
Melbourne VIC	-$46,000
Pyrmont NSW	-$42,000
Oak Park VIC	-$41,000

Source: modelling of PropTrack data

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Originally published as Aussie suburbs where home prices are set to crash