Sydney house prices have stalled ahead of the Reserve Bank’s cash rate decision, though experts have warned that this does not mean more affordable prices are on the horizon.
According to PropTrack economist Angus Moore, tomorrow’s cash rate decision – where a rate rise looked “quite likely” – could work to slow price growth, albeit not substantially.
“Sydney’s fundamentals remain relatively firm,” he said.
“Unemployment is still very low, wages are growing, albeit maybe not as fast as we had seen a few years ago.
“While rates are very likely to rise in the near term, Sydney hasn’t seen the sort of growth that Adelaide, Perth or Brisbane has seen, and so we’re still expecting to see growth in Sydney as a result.”
PropTrack economist Angus Moore
According to PropTrack’s latest House Price Index, the value of Sydney homes barely moved the needle in January, rising by a marginal 0.1 per cent.
Mr Moore said this “slow start” to the year was owing to a “pretty healthy” stock of homes on the market.
“That’s probably taking some of the heat out of price growth and out of competition,” he said.
“So that’s possibly part of why we’ve seen a bit of a slowdown.”
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A cash rate hike is expected from the RBA tomorrow. Picture: NewsWire/Christian Gilles
PropTrack’s latest data shows that since last January, the price of Sydney dwellings has risen a modest 5.7 per cent, compared to the likes of Perth (17.5 per cent), Brisbane (14.4 per cent) and Adelaide (13.8 per cent).
According to Mr Moore, these statistics are signs that housing affordability is not expected to improve materially over the next 12 months.
“Wages are growing,” he noted.
“It’s important to point that out and that does help offset some of the cost, but mortgage rates going up obviously increases mortgage burdens and the fact that home prices are still rising also increases mortgage burdens for new borrowers.
“So it’s hard to see affordability improving in that sort of environment in which prices are still growing and rates are going up.”
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Bankstown has been a major part of South West Sydney’s strong annual growth. Picture: Pace Property
According to the new House Price Index, the South West was Sydney’s highest growing region, with dwelling prices rising 12.18 per cent since last January.
Popular areas like Bankstown and Liverpool grew by over 10 per cent in the year to December, as the region’s relative affordability continues to attract interest.
Bankstown even saw its house price record smashed late last year with the $6.45m sale of the opulent and chandelier-centred 84 Fenwick St.
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84 Fenwick St set Bankstown’s record house price late last year.
One half of this Bankstown duplex sold for $1.91m in mid-January.
PropTrack’s House Price Index also found that regional NSW has outperformed Sydney since this time last year, with house prices rising by 7.6 per cent.
The highest performing region since has been New England in the state’s north.
Dwellings in the region have surged 12.81 per cent over the course of the year, highlighted by suburbs like Armidale where house prices shot up 11.6 per cent in the year to December.
The median house in Armidale will set buyers back $585,000, just over one third of Sydney’s $1.617m median.
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This four-bedroom Armidale home on a 40-acre lot sold for $1.2m in January, over $400,000 under Sydney’s median
This recent $655,000 sale is more indicative of Armidale’s median property.
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