Buyer relief: Sydney house prices may finally fall

After years of steep price growth, momentum is finally fizzling out of Australia’s property market, according to CoreLogic’s latest Home Value Index. 

Just half of Australia’s eight capital cities – Sydney, Brisbane, Adelaide and Perth – saw growth over the September quarter. 

Every other capital city saw a decline in median home prices. 

Even in the red-hot cities of Perth and Adelaide, the pace of growth has slowed notably. Prices in Perth rose just 4.7 per cent over the past three months, down from 6.2 per cent in the previous quarter. 

“Pretty much everywhere we’re seeing a slowdown in the rate of growth,” said Tim Lawless, research director at CoreLogic. 

“Sydney hasn’t recorded a rate of growth over a quarter this low since the very beginning of the cycle back in February 2023.” 

Median home prices in Sydney rose just 0.5 per cent over the September quarter, and Lawless believes it’s a trajectory that is set to continue. 

“In some of the larger markets like Sydney, it does look like that market’s set to level out if not move into some level of a shallow downturn as well,” he said. 

“In six months from now, I think we’ll probably see a continuation in this loss of momentum.” 

A lot of factors have influenced the downturn in home prices – among them a rise in fresh housing stock on the market, slower population growth, and anticipation of an interest rate cut – but there’s one factor that stands out above the rest. 

“I think anyone would say that we’ve been through some spectacular levels of volatility,” Lawless said. 

“It has defied logic that the market could have been this strong at a time when interest rates are very high and household debt levels are quite stretched.” 

“We’ve moved through a very strong housing market at a time when the economy itself has been quite weak, and […] I think we’re finally starting to see affordability pressures biting.”