Sydney’s property market is not looking good for sellers at the end of this year with more listings, dwindling prices and worsening auction slumps.
SQM Research revealed that total residential listings increased by 7.5 percent over November, pushing the total number of homes for sale Sydney to 40,000, the highest number recorded since 2009. Current listing levels are 20.9 percent higher than from last year.
Dwelling values in Sydney also fell 1.4 percent in the same month from October, bringing the prices down 8.1 percent over the past year to a median of $821,438, according to CoreLogic’s Home Value Index.
“Since peaking in July last year, Sydney’s housing market is down 9.5 per cent which is on track to eclipse the previous record peak-to-trough decline set during the last recession when values fell 9.6 per cent between 1989 and 1991,” CoreLogic head of research Tim Lawless told the Sydney Morning Herald.
In the first weekend of December, Sydney recorded an auction clearance rate of 41.4 percent with chances of sinking into the 30s over the month. SQM’s Louis Christopher said the last time Sydney fell into the 30s was in October-November 2008 during the Great Financial Crisis. The weekend turnover totalled $129 million in sales, well below the near $600 million in the same period a year prior, Domain reported.
Lawless said this downturn was driven by multiple factors, including tighter conditions for investment, housing affordability constraints and a general oversupply.
“We expect headwinds for tighter credit will continue for the foreseeable future and will continue to temper housing market activity,” said Lawless. “This will be especially the case for those markets where investment demand is most concentrated, and where housing costs are high relative to incomes, such as Sydney and Melbourne.”