$100k nosedive: Home prices fall in half of Sydney

Home prices have been falling in over half of Sydney’s suburbs over the past three months as would-be buyers hold off purchases in the hope of a rate cut next year.

Exclusive PropTrack data revealed the drops skimmed over $100,000 off the average price of homes in many areas.

The falls coincided with a substantial increase in property listings in the lead up to spring, with the choice of available homes doubling in many areas.

Last month was also the busiest September for new listings in nine years.

Experts revealed the unusually good conditions for home seekers have provided a rare “window of opportunity” to get lower prices ahead of an expected market boom once interest rates are cut.

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Josh Dufficy and Melanie Cook recently snapped up their first home after facing much less competition than they expected. Picture: Thomas Lisson

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PropTrack economist Anne Flaherty said it could be the calm before the storm.

“We’re seeing a lot of homes for sale and that’s creating a lot of opportunities for buyers and it’s slowing price growth,” she said.

“Once we see a rate cut, it’s likely the market will go up as buyers will have bigger budgets.

“A cut will also boost confidence. We know one of the biggest concerns for buyers is an increase in rates and a cut would give them more certainty.”

PropTrack indicated many of the biggest falls in prices were recorded within inner suburbs and coastal areas – especially those across The Central Coast.

Median unit prices dropped by $50,000-$89,000 in Central Coast suburbs Toukley, Erina and Gorokan over the quarter, while Manly, Bondi, Fairlight and Clovelly recorded median house price falls of over $250,000.

PropTrack economist Anne Flaherty said it was unlikely falls would continue once rates were cut.

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There were also significant unit price drops in Waverley, Bondi Junction, Darlington, Millers Point, Drummoyne and Lewisham, among others.

Other notable drops were reported in former development hot spots where landlords are now scrambling to offload their units – mostly in suburbs across the Greater Parramatta region and northwest.

They included North Rocks, where unit prices are now an average of about $93,000 cheaper than at this time last year, and Norwest, where units are $126,000 than a year ago.

“Investors selling is a big contributing factor to prices falling in a lot of areas,” Ms Flaherty said, noting that investors were often selling higher density units they purchased off the plan.

“Investor sales mean there is a lot more stock, particularly unit stock, and that’s reduced a lot of the competition between buyers.”

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SQM Research director Louis Christopher said Sydney was currently a “buyer’s market” and would remain so until the Reserve Bank cut interest rates.

Higher interest rates were a factor in the market slowdown and climate of higher listings because more struggling homeowners were beginning to offload their homes, Mr Christopher said, although he noted that arrears and distressed sales remained low.

Mortgage Choice broker Leanne Johnstone said the feeling from home seekers was that Sydney was becoming easier to buy into.

“People are saying there are more properties available in their price range,” she said.

“In the past buyers were saying there was nothing out there, and there was twice the amount of people bidding against them.

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Regents Park houses posted some of the biggest falls.

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“Clients (now) appear comfortable with the prices they’re getting. I don’t have as many indicating they were in massive bidding wars. They’re not having to compromise as much as they might have previously.”

Josh Dufficy and Melanie Cook recently bought their first home and were surprised to secure a property they loved after only three weeks of looking.

“We are stoked with the price we paid,” Mr Dufficy said, adding that it was below their original budget.

“We were prepared for tons of competition, and everywhere we showed up there were lots of people, but I don’t think there was a massive shortage of places.

“We had a couple of places we liked. We put in offers on four. They were all considered and not far off where we needed to be, so it wasn’t crazy.”

– With additional reporting by Taylor Troeth