house prices

Will property still be overpriced after house prices have fallen?

PHOTO: The weakening market won’t make it easier for poorer Australians to own a home. Photo: Stephen McKenzie

Price falls forecasted by Australian banks would only bring property prices back to last year’s levels in Sydney and Melbourne, and would do little to address affordability, experts say.

Westpac predicted earlier in the year that prices could come back 10 per cent from their peak, which Domain senior research analyst Nicola Powell said would only take prices back to 2019.

“It seems significant but it’s only pulling prices back to March and June 2019,” she said. “It does aid affordability. But that still makes for a median above $1 million in Sydney.

“Even though it’s improved affordability, prices are still pretty unattainable.”

Dr Powell said Sydney in particular could still be considered to be overpriced.

With a 10 per cent fall in house prices, its median would fall to $1.05 million, which was where it was last June, Dr Powell estimated.

In Melbourne it would go to $822,000, which was where it was in March 2019.