Sydney has seen its third straight month of home values falling. Picture: John Feder/The Australian.
Sydney dwelling values have recorded their largest monthly fall in 16 months, as the coronavirus pandemic continues to affect the property market.
The latest CoreLogic Home Values Index reports the median property value across Sydney dropped 0.9 per cent to $866,110 during July.
The slump is largest monthly fall of the past three months and means the average dwelling is now back at January prices. Despite this, property prices still remain 12.1 per cent higher than a year ago.
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The market has remained stable since the pandemic Picture: Gaye Gerard/ Sunday Telegraph.
The median price of a freestanding house was $1,002,107, 1.0 per cent lower than at the start of July, while the median unit price was $747,238, 0.7 per cent lower. The fall is being fuelled by homes at the top end of the market, which have suffered more a substantial drop in value than cheaper houses.
CoreLogic head of research Tim Lawless said the market has remained resilient during the pandemic, with prices only falling 2.1 per cent since the peak in April.
“Record low interest rates, government support and loan repayment holidays for distressed borrowers have helped to insulate the housing market from a more significant downturn,” he said.
Mr Lawless added government incentives that have targeted first homebuyers has result in increased demand for property from that section of the market.
With fiscal support set to taper from October and repayment holidays expiring at the end of March next year, Mr Lawless said these two events will test how strong the market is and could result in larger price falls.
“Urgent sales are likely to become more common as we approach these milestones, which will test the market’s resilience,” he said.
CoreLogic reports new listings are up 46 per cent from the recent lows of early May and are now at a similar level to a year ago.
Apartments dropped 0.7 per cent during July.
“The rise in fresh listings implies homeowners have become more willing to test the market,” Mr Lawless said.
CoreLogic property analyst Eliza Owen said the market in Sydney is unlikely to improve on a pricing front until international borders reopen and the economy starts to recover.
“The Sydney market relies on migrants to help fuel demand for property, so until they can enter again, prices are unlikely to increase,” she said.
Regional NSW was one of the best performing markets in Australia, with home values up 0.5 per cent to $468,220 during July.
Regional NSW saw home values jump 0.5 per cent during July. Picture: Tourism Wollongong.
Ms Owen said the pandemic has helped the regional property market due to Sydneysiders looking to leave the city for regions with working from home now normal.
“It is early to see how this will play out, but generally regional markets lag behind capital cities, so we could see prices begin to fall later this year.”
Values across Australia dropped 0.6 per cent to $552,912 in July, with Melbourne the hardest hit. Canberra on other hand saw property prices increase 0.6 per cent to $641,360.
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