Sydney property prices decrease for the first time in 3 years
Latest reports for the Australian property market have revealed that real estate is entering a new cycle with dwelling values falling across five capital cities during the month of November.
After 3 years of solid growth in the Sydney property market, this month Sydney property prices decrease by 1.4% while Melbourne values fell by 3.3%, Hobart dropped by 2.4%, Darwin fell by 1.3% and Canberra fell by 0.5%. Home values rose in Adelaide, which had its highest month-on-month growth rate of 0.7%, Brisbane values rose by 0.6% and Perth values increased by 0.3%.
Sydney maintained the highest annual growth rate for the country at 12.8% for the period of November 2014 to November 2015, but this figure is a significant decrease from the peak rate of annual growth rate of 18.4% that Sydney experienced in July this year. Melbourne’s annual growth rate over the 12 months ending November this year was 11.8% which, like Sydney is a significant reduction from the earlier peak of 14.2%.
Only 2 capital cities had values which have declined over the 12 months ending November, those being Darwin with a property value decrease of 4.2% and Perth with a property value decrease of 4.1%.
Auction clearance rates dropped to 55.7% which is the lowest level Australia has seen since 2010 and another dramatic decrease from the highest auction clearance rate of 83.3% that was recorded in May this year.
A combination of the banks rise in interest rates, independently of the RBA cash rate and the tighter lending guidelines for property investors are major contributors to the turn in the market. Other factors include tighter mortgage servicing criteria as well as affordability in the Sydney and Melbourne housing markets and low rental yields for property investors.
In the three months leading up to November, the best performing capital city was Canberra with property prices increasing by 2.0 per cent and the lowest performing capital city was Hobart with values decreasing by 2.9%. The highest rental yields were Hobart houses with gross rental yield of 5.4% and Darwin Units with 5.5. The lowest rental yields were Melbourne houses with gross rental yield of 3.0% and Sydney units with a rental yield of just 4.1%.
Sydney remains the most expensive city with a median dwelling price of $810,000 and Hobart is the most affordable city with a median dwelling price of $335,000.
Property Market statistics taken from CoreLogic RP Data November Home Value Index.