Sydney property market is cooling down as lending slows and vendor discounting rises.
The difference in asking price and final sale price in the city has increased to 4.4 per cent. Investment bank Morgan Stanley said the market is “unlikely” to “turn around anytime soon” due to limited credit and record household debt.
Over the past year, Sydney’s median house prices have fallen by 4.5 per cent. Auction clearance rates also had a significant dip in June.
According to the bank’s research, the falling prices reflected the national annual growth rate, which reaches its lowest in more than five years.
However, Deutsche Bank’s economist Phil Odonaghoe said the worst of the market downturn has passed for Sydney.
“Recent auction clearance rates, running at a little under 50 per cent once adjusted for withdrawals, actually point to a very modest improvement in dwelling price growth over the coming six months, or more specifically, ‘less negative’ year-ended growth,” Odonaghoe told the Sydney Morning Herald.