Apartment Prices in Sydney Will Drop 8% in 2019: Report
Apartment values across Australia are expected to plummet by the end of 2019.
According to finder.com.au, prices along the east coast are predicted to fall as much as eight per cent by the end of next year with Sydney's apartments expected to be the hardest hit.
The negative sentiment was shared by a panel of 32 experts and economists who forecasted property values would dip by the end of 2019 as part of finder.com.au RBA cash rate survey.
A predicted 8.44 per cent reduction over the next year would result in almost $60,000 being knocked off the price of the average unit in the NSW capital.
Houses in Sydney are expected to fare slightly better, dropping by 5.81 per cent over the year, a loss of almost $54,000.
In Melbourne, lower property prices mean an expected $38,000 will be slashed off of the city’s units, and $33,000 off its houses by the end of next year.
Related: Sydney House Prices Are ‘50% Overvalued’: The Economist
finder.com.au RBA cash rate survey results
| City | Houses % | Houses $ | Apartments % | Apartments $ |
|---|---|---|---|---|
| Sydney | -5.81% | $53,620 | -8.44% | $59,906 |
| Melbourne | -4.60% | $33,350 | -7.13% | $38,163 |
| Perth | -2.08% | $10,417 | -3.42% | $12,983 |
| Brisbane | -1.33% | $7,200 | -4.42% | $17,998 |
“Those in the market for an apartment face a much greater risk of losing equity compared to those buying a house, due to an oversupply of units in capital cities,” finder.com.au insights manager Graham Cooke said.
According to Cooke those at high risk are “rentvestors” — those who purchase an investment property while continuing to rent — as properties in lower-priced areas have historically experienced the hardest hit.
As property prices are expected to decline, finder.com.au’s Economist Sentiment Tracker shows positive signs for housing affordability, remaining at a year-long high of 46 per cent since its low point of 23 per cent in July.
“A positive to take out of all of this is that housing will get more affordable,” Cooke said.
“It’s overwhelmingly a buyer’s market so use your bargaining power and don’t take the price guide at face value.”
Related: Improved Housing Affordability Short Lived: Report
“As well as falling property prices, and therefore a smaller mortgage, first home buyers are spoilt for choice when it comes to home loans on offer, with historically low variable and fixed rates, alike, in market.”
Economists surveyed by finder.com.au collectively expect the cash rate to remain stagnant, as it has for more than two years, due to low inflation and low wage growth, despite the unemployment rate dropping to 5 per cent.
“Higher interest rates and tighter lending restrictions by the banks mean that Reserve Bank of Australia won’t be adjusting the cash rate soon,” LJ Hooker head of commercial Mathew Tiller said.
“There is little chance of a change in the official cash rate in the short term, especially given the ongoing soft inflation numbers and the slowdown in the housing market."
Seventy-eight percent of those surveyed expect the next rate change, whenever it does happen, to be an increase.
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