Apartment prices to fall 8pc by end of 2019

Sydney and Melbourne are now overwhelmingly buyers’ markets, finder.com.au says.

Apartment buyers face a greater negative equity risk. Photo: Tim Pascoe

Apartments prices along the east coast are predicted to fall a further eight per cent by the end of 2019, finder.com.au says.

Sydney’s market will take the biggest hit. A reduction of 8.44 per cent is expected to knock almost $60,000 off the average unit price. At a rate of 7.13 per cent, Melbourne units will become $33,350 cheaper.

Graham Cooke, Insights Manager at finder.com.au, said it was surprising that property values would drop so dramatically in such a short period.

“Those in the market for an apartment face a much greater risk of losing equity compared to those buying a house, due to an oversupply of units in capital cities.

“Property on the outskirts of cities will experience a much more significant drop than those in the CBD, as demand is generally not as strong in these areas.”

Houses prices will fare better, with economists predicting a 5.81 per cent fall in Sydney prices knocking $53,620 off valuations. Melbourne is again expected to be in a better position, falling 4.60 per cent, equivalent to $33,350.

“It’s overwhelmingly a buyer’s market”, Mr Cooke said, telling first home buyers to to use their bargaining power to get a better price and rate.

The research coincides with the announcement that NSW will amend stamp duty charges to account for changes in inflation.

Mr Cooke said he doubted a $500 incentive would spur buyers to enter the market at a rate that would influence economist predictions. More significant changes would need to be made to make saving for a home more practical.

“If the government could halve stamp duty for example, that could definitely get a lot of first home buyers to come on the market or save their deposit sooner,” he said.

On interest rates, all 32 experts and economists surveyed for the finder.com.au study forecast the cash rate will be held for a 25th consecutive time tomorrow.