Where to for Sydney property in 2019? Experts expect further price falls . . .
After a relentless five-year run of strong price growth across Sydney’s property market, 2018 marked the moment prices fell for the first time over a 12-month period since 2012.
In 2014, prices grew 12.8 per cent followed by a whopping 14.9 per cent in 2015. Price growth began to wane in 2017 when dwelling values increased by just 3.2 per cent.
Property prices have now fallen 7.2 per cent over the year to date, according to CoreLogic – and 9.5 per cent since they peaked in July 2017 – with industry experts anticipating more pain to come for homeowners in the new year.
AMP Capital’s Shane Oliver expects prices in Sydney to drop by another 10 per cent over the 2019 calendar year.
“The drivers of that [forecast] are a continued credit squeeze and the fundamentals like the increased supply of apartments, a lack of foreign investment and possible changes to the capital gains tax and negative gearing at the next election [weighing on sentiment],” Dr Oliver said.
“The pipeline [of apartments] yet to be built is still immense, there’s a huge amount of cranes up over the city and the vacancy rate is now above its long-term average and rising,” Dr Oliver said.
Sydney’s vacancy rate jumped to 3.2 per cent in November, according to SQM research, while the long-term average sits at 2.2 per cent.
Apartment-heavy areas of Sydney – “big chunks of the west and the lower north shore” – were most at risk, Dr Oliver said.
Declines in the sharemarket could also start to weigh on the eastern suburbs as well if investors and those working in financial services “felt less well off and less inclined to trade up or invest in property,” he said.