House prices drop by $190k in some Australian suburbs

There are warnings that property prices are predicted to plunge with some areas in Australia already experiencing huge drops in value.

Houses prices in some Sydney suburbs have dropped by a whopping $190,000 in the last three months as more experts warn that Australia’s property prices are set to plunge.

The inner city suburb of Beaconsfield suffered the biggest slump across the country with house prices plunging 9.2 per cent meaning they are now worth $162,662 less than three months ago, according to CoreLogic.

The popular inner west suburb of Newtown suffered a $120,207 loss in house prices in the past three months, a massive drop of 6.6 per cent taking typical values to $1.82 million.

Surry Hills faced a loss of $134,054 with prices falling by 6.1 per cent to $2.19 million, while the waterfront suburb of Birchgrove experienced a drop of 6 per cent or $190,581 to $3.17 million.

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Birchgrove prices dropped by $190,00 in the last three months. Picture: Timothy Clapin

A house in Birchgrove.

Two Victorian suburbs also felt price pains with South Yarra prices dropping by 5.2 per cent to $2.16 million and Toorak suffering a 4.7 per cent loss to $4.35 million.

The biggest loser in the apartment market was the Sydney suburb of Barangaroo where prices slumped by 8.5 per cent to $2.29 million, followed by Melbourne’s Box Hill where there was a 5 per cent drop.

Eliza Owen, CoreLogic’s head of research, said the premium end of the market was more susceptible to plunging prices but the huge increase in values had also impacted demand.

“I think affordability constraints, tighter lending conditions and higher fixed rates have likely been enough to cool premium markets, and the sharpness of the fall relates to the volatility in the high end of the market, and the extremely strong run up in price growth,” she told the Australian Financial Review.

“I think it’s a reflection of how strong the upswing in the more expensive central markets has been.”

Newtown prices also dropped. Picture: Adam Yip

Surry Hills prices dropped by over $134,000.

Experts have warned that available buyers have also been reduced as people struggled to afford the huge house prices after the market went nuts during the pandemic.

Instead of the premium market, it was Sydney’s outer suburbs that recorded healthy price gains in the past three months.

The western suburb of Silverdale saw house prices shoot up by 6.9 per cent to $1.13 million, while Camden South rose by 6.3 per cent to $976,137.

But it was Queensland where the biggest price increases were found with the rural area of Kooralbyn surging a huge 14.9 per cent to $563,389 and Logan Central soaring by 14.3 per cent to $435,811.

In potential bad news for first home buyers, Ms Owen predicted the affordable end of the market would see the biggest increase in prices, including in Sydney, Melbourne and regional areas.

“This is because more affordable segments tend to have less volatility in growth rates – the highs are not as high, but the lows are not as low,” she said.

Barangaroo apartments dropped the most across the country.

Overall house prices are predicted to stall across Australia by May and to even drop by the end of December, according to Westpac, before a dramatic decrease in the coming years.

The bank has predicted Australian house prices will fall by 7 per cent in 2023 and by a further 5 per cent in 2024 in its latest report.

Meanwhile, despite typical house prices in Sydney soaring by 23 per cent in the past year, there are now forecasts they could drop nearly $200,000 by the end of 2023, analysis by the Commonwealth Bank showed.