Property prices in Sydney has been soaring for three years with prices up by 52.6 per cent or $349,183 while house prices is up by 14.8 per cent over 2015, but it has now fallen by the largest quarterly drop ever recorded, Doman reported.
The median house price in Sydney dropped 3.1 per cent over the December quarter 2015. It is reported that the first drop was recorded since June 2012. It is also speculated that the median house prices will most likely go down below the million-dollar benchmark by mid-year.
“This is quite a sobering, startling result. The rollercoaster of house price growth Sydney has been on has clearly crashed,” said Domain Group senior economist Andrew Wilson.
The decline is caused by banks increasing interest rates for both home buyers and investors back in October. Even apartment prices fell to 2.8 percent over the quarter of December which is the first recession since March 2013.
Other negative things that affected the December quarter are rising mortgage rates, a surge of new apartments, restrictions placed on investor lending, and a slowdown of Chinese buyers, AMP Capital chief economist Shane Oliver revealed.
House prices declined in some parts of Sydney except from the west which has increased to 1.8 per cent while those in the south-west areas remained flat. In the east and the city, house prices are down to 4.1 percent.
The median apartment price also fell in all regions in Sydney, except that from the lower north which remained flat. But the worst performer is the inner west wherein the median apartment price is falling by 4.6 per cent.
The slowdown in Sydney is said to have implications for the NSW Government, which puts a dampener on the stamp duty cash cow that is forecasted to grow up to $8.6 billion by 2018/2019, the Sydney Morning Herald reported.
