Shock $80k hit to Sydney home prices
The rollercoaster of Sydney’s home prices appears to have ended, but that’s not necessarily good news for buyers or sellers.
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Sydney home prices have hit a record high after further growth in November – despite the Reserve Bank whacking borrowers with another interest rate hike early in the month.
PropTrack’s latest Home Price Index released Friday showed the city’s median dwelling price lifted 0.32 per cent over the month.
The median dwelling price is now $1.065m and is higher than the previous peak in February last year – back when the market was in the midst of a Covid-era boom and interest rates were at record lows.
The rise over November was the 12th in a row and means home prices in Sydney are 8.4 per cent higher than they were in November 2022.
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This means that the Sydney median dwelling price is about $80,000 pricier than it was the same time last year, in a massive blow to home buyers.
It also means all of the falls recorded over 2022, when the RBA first began hiking interest rates, have eroded and the market has made a full recovery from that slump.
PropTrack economist Eleanor Creagh said a mix of forces were pushing up prices.
“Strong housing demand, buoyed by record net overseas migration, tight rental markets, low unemployment and home equity gains, has worked alongside limited housing stock to offset the impacts of higher interest rates this year,” she said.
PropTrack indicated there was high variance in growth across city regions.
The Parramatta region had the biggest growth in prices at 10.54 per cent year-on-year, followed by the inner west at 10.06 per cent and inner southwest at 9.66 per cent.
The Central Coast, outer southwest and far west and Blue Mountains had the slowest growth over the year at less than 5 per cent.
Ms Creagh said that a sharp rise in construction costs would keep upwards pressure on prices into the New Year.
“Affordability has deteriorated, mortgage servicing costs are higher and borrowing capacity has been reduced but with the combination of the limited supply environment and the slowdown in new builds and population growth, those factors are offsetting and continuing to drive prices,” she said.
“We still have strong housing demand and slower new supply. Under those conditions we will continue to see a rise in prices, but at a slower rate.”
Ms Creagh noted that the rate of Sydney home price growth has slowed over spring due to an increase in listings, which gave buyers a better selection of properties.
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“We have seen a significant uplift in property hitting the market and in comparison to the spring selling season last year, selling confidence is on the rise,” she said. “That increase in choice is contributing to a slower increase rate.”
Regional NSW prices were up 1.56 per cent year on year, but remain 1.64 per cent below their peak in April 2022.
Sydney home prices are 32 per cent higher than were at the start of the Covid pandemic in March 2020.
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Originally published as Shock $80k hit to Sydney home prices
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