PHOTO: House prices are falling fast. FILE
- Four of Australia’s five biggest drops in median house prices in June in Sydney
- Price dives in North Sydney/Hornsby, inner west, northern beaches, city/south
- Interest rate hikes reduced the borrowing capacity of buyers, Domain said
Interest rate hikes have caused dramatic plunges in house prices in what were until recently Australia’s hottest property markets, with two elite suburbs tanking by $250,000 – as experts warned worse is coming.
Median property prices collapsed by $200,000 and more in several parts of Sydney in the June quarter, with houses worst affected although unit prices tumbled too.
One leading housing economist said buyers’ borrowing capacity had been ‘eroded’ because of interest rate hikes and as rates keep climbing, prices would continue to deteriorate.
On Tuesday the reserve Bank of Australia raised the cash rate to a six-year high of 1.85 per cent, and all major banks are forecasting that rates would keep being raised for the rest of this year at least.
Interest rate hikes have caused huge drops in house prices in Australia’s hottest property markets, with two elite suburbs tanking by $250,000 (pictured: auctioneer Adrianna May in Sydney)
This has taken the cash rate from a three-year high of 1.35 per cent to a six-year high of 1.85 per cent. This would see someone paying off an average $600,000 mortgage cop a $169 increase in their monthly mortgage repayments
Plummeting median house prices
Sydney – North Sydney and Hornsby – down $250,000 (-8.4 per cent)
Sydney – Inner West – down $200,000 (-8.3 per cent)
Sydney – Northern Beaches – down $187,500 (-6.8 per cent
Melbourne – Inner East – down $107,500 (-6.1 per cent)
Sydney – City and Inner South – down $90,000 (-4.7 per cent)
Brisbane – West – down $50,000 (-4.3 per cent)
Sydney – Sutherland – down $42,500 (-2.6 per cent)
NSW Mid North Coast – down $33,500 (-4.5 per cent)
Brisbane – South – down $30,000 (-2.8 per cent)
Melbourne – Inner – down $27,000 (-1.8 per cent)
The rise meant borrowers with a $600,000 mortgage would pay $169 more each month to repay it, while those with a $1million loan would pay an extra $281.
Across Australian suburbs, four of the five biggest dives recorded in median house prices in June happened in Sydney, Domain figures said.
Homes in North Sydney and Hornsby fetched a median of $2.72million in June, a shocking fall of $250,000 on the previous quarter, 9 newspapers reported.
That represented an 8.4 per cent tumble on the three months to March 2022.
Houses in Sydney’s trendy inner west, which includes dozens of popular suburbs separating the city from the vast western suburbs, plummeted by $200,000 in June.
The median for a house in the inner west was $2.2million, down a huge 8.3 per cent.
Homes in North Sydney and Hornsby fetched a median of $2.72million in June, a shocking fall of $250,000 on the previous quarter (Pictured, Sydney skyline viewed from north Sydney)
Houses in Sydney’s trendy inner west, which includes dozens of popular suburbs separating the city from the vast western suburbs, plummeted by $200,000 in June
Interest rate rises had worsened other existing factors in the market – an undersupply of housing in Australia’s low-density cities and inflation eroding people’s purchasing power – said Domain chief of research and economics Dr Nicola Powell.
‘Borrowing capacity has been eroded by higher rates and a higher cost of living … and there’s more to come in terms of a further acceleration in a deterioration in prices,’ she said.
On Sydney’s sprawling but sought-after Northern Beaches house prices dived by $187,500, according to Domain.
The median sale price on ‘the beaches’ was $2,582,500 in June, 6.8 per cent lower than March figures showed.
House prices in Melbourne’s inner northeast, including iconic suburbs such as Fitzroy and Collingwood, plunged to $1.66million, a 6.1 per cent or $107,500 slide.
Prices for Sydney city and its inner south fell by $90,000 or 4.7 per cent to $1.845million.
Elsewhere, house prices in Brisbane west were down $50,000 (4.3 per cent), and down $30,000 (2.8 per cent) in the city’s south.
In inner Melbourne house prices fell $27,000 (1.8 per cent).
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