Amidst falling Australian’s house price scenario, the next two months could witness a drop in Sydney's median house price below $1 million, as per market expectation. This could be an immense psychological shift for the buyers as a scenario like this has not been recorded in four years. The forecast is expected to occur even if the present decline in property undergoes a slight positive shift.
The housing market slowdown has been the most severe one in more than twenty years. It has come close to cross over the long slump of 2004-06. The price of a median house in Sydney now stands at $1,027,962, when compared to last year’s price of $1,161,083, with a 11.5% drop on Y-o-Y basis.
From their mid-2017 pinnacle, the Sydney prices have fallen 14.3% which includes a drop of 3.1% over the quarter ending March 2019, according to reports.
Earlier this month, the securitisation analysts at National Australia Bank Ltd (ASX: NAB) forecasted a fall in the house prices across Melbourne and Sydney. The speculation by the analysts was laid down after comparing house prices and the earnings of full-time workers.
Some analysts believe that this is great news, especially for first-home buyers as it aids them in their house buying process. He concluded that in particular, the two-bedroom terraces, which is the most lucrative option for a first-time house buyer would have a fall below $1 million. This figure has been not achieved in the last four years as the median price has always been over and above $1million. The sales at that point in time were always at $1.2 or $1.3 million.
Besides, in February 2019, the Reserve Bank of Australia had laid down its concerns of uncertainty in house prices.
In a similar case scenario, even the Melbourne house prices have taken a down shift with a decline of 2.4% in the quarter ending March 2019 (compared to previous quarter) and 10.4% compared to March 2018 quarter. The yearly median drop now shows a figure of $94,000.
The Housing market in Brisbane slowed-down over the year with a 0.3% drop in prices post six continuous years of annual growth. The Canberra reported 2% drop in house prices over a year in March quarter 2019. showcase a likewise figure, which has been the largest price fall recorded in a decade.
As per economists, these downfalls can be majorly attributable to restrictive credit policy rather than the price of credit. In this regard, investors are eyeing RBA upcoming interest announcement; a possible cut in the interest rates could help in house price recovery.
Exceptional to the drop in the unit prices in all these capital cities, the Hobart prices showed an increase of 7 per cent during March quarter as compared to previous corresponding period with Adelaide experiencing 2 per cent jump in house prices.
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