Sydney prices fall for first time since Covid pandemic began as property market stalls, PropTrack data reveals

The increasing threat of a rate rise and constant disruptions to the property market caused prices to stall through April.

Auctioneer Michael Garofolo calling an auction in Concord, in Sydney’s inner-west, last weekend. In April, property prices in Sydney fell for the first time since the pandemic began. Picture: Monique Harmer.

The increasing threat of a rate rise and constant disruptions to the property market caused prices to stall through April, according to the latest data from PropTrack.

As Australians enjoyed two long weekends through April for Easter and ANZAC Day, rapidly rising inflation almost ensured the Reserve Bank of Australia would raise interest rates in the coming months.

These hurdles, coupled with rising affordability pressures and the upcoming federal election contributed to home prices rising a mere 0.13 per cent month-on-month to bring the median property price to $691,000.

Sydney recorded its first fall in prices since the boom began, while most other capitals stagnated.

PropTrack senior economist Paul Ryan said reduced activity last month came down to one thing the market hates the most – uncertainty. Because of this, the market may not return to the strong growth phase it was experiencing prior.

“There‘s a bit of a pause in activity now and price growth being pretty flat across the capitals reflects that,” Mr Ryan said.

“Then, there is this widespread expectation that even prior to the election, the RBA will increase interest rates and that will start this phase of interest rates going up and borrowing costs increasing. The housing market may return in a different place than it started out before the mid-April break.”

Sydney recorded its first decline since the pandemic boom began, down 0.1 per cent through April. The most significant downward pressure was in Hobart (down 0.44 per cent), which hadn’t seen prices ease since early 2018.

Mr Ryan said affordability may beginning to constrain buyer activity given both of those markets have recorded strong growth over the last 10 years.

Elsewhere in the country, a two speed market is again beginning to appear between the regions and capital cities.

Regional Australia benefited from renewed popularity at the start of the pandemic two years ago. While an equilibrium was reached at the height of the boom early in 2021, on a year-on-year basis, capital cities growth (up 13.63 per cent) has begun to fall behind the rest of the country (up 23.01 per cent).

Monthly growth in capital cities (up 0.02 per cent) is less than half of that in the regions (up 0.44 per cent)

“There’s this big kind of split,” Mr Ryan said.

“Both Brisbane and Adelaide, two smaller capitals, are still seeing growth and aren’t slowing as much as the other major capitals and, of course, we’re still seeing regional growth as well.”

Of the capital cities, the strongest performers in April were Darwin (up 0.53 per cent) and Perth (up 0.45 per cent), although both have seen weak conditions throughout 2022. Adelaide was up 0.34 per cent, Brisbane rose 0.22 per cent, while Melbourne (up 0.05 per cent) and ACT (up 0.04 per cent) were flat.

The strongest performers of the month in April were regional Tasmania (up 0.57 per cent), regional NSW (up 0.55 per cent), and regional Queensland (up 0.51 per cent).