Sydney prices, including the May result, have been down 1.5% since February, according to CoreLogic data.
Tim Lawless, research director at CoreLogic, said the rate of decline has been gaining momentum since the first month-on-month decline in February, at 0.10%.
“Through the previous fall, which began in mid-2017, the Sydney market took 15 months for the monthly rate to reach 1%, so we are seeing a stronger slowdown in the conditions of the market, “he said.
“The market is probably declining faster due to a number of factors, such as higher levels of housing debt and higher interest rates, so households are more likely to be more sensitive to higher mortgage rates and a sharp drop in consumer sentiment from previously high levels. “
During this previous fall, the strongest monthly fall was recorded in December 2018, when Sydney prices fell by 1.8 per cent.
“Prices were constantly accelerating to get to this point, as there was no moment of shock at that time, as with the higher interest rates,” Dr. Oliver said.
“Stricter lending standards cut or reduced the supply of credit, affecting only new borrowers. But now, with higher interest rates, it affects everyone, both new and existing borrowers. so there is more risk. It’s a different ball game. “
“Long way down for prices to go down”
Melbourne is also on track for a deeper 0.7% price drop during the month, and combined capital 0.3%.
While Brisbane is likely to see solid growth of 0.8% in May, this is less than half of the 1.7% monthly growth recorded in April and well below the 2.9% high in April. last December.
CoreLogic will release its May home value index on Wednesday.
“The strength of other cities is no longer enough to withstand the national average, so it seems that national prices have changed as well,” Dr. Oliver said. “But there is still a long way to go for prices to fall as the Reserve Bank continues to raise rates.
“We’re looking at another rate hike in June and a few more at the end of the year, which would really put a brake on the real estate market, not because people won’t pay their loans, but simply because buyers won’t be able to apply for loans. a lot. “
Lawless said there were clear signs that sellers were struggling to get a sale while buyers withdrew.
“We’re seeing evidence that terms of sale have become tougher,” he said.
“Auction settlement rates in Sydney and Melbourne’s major auction markets are now well below average.
“According to data from the end of April, selling time has increased for private deal sales and discount rates are also rising as sellers find that they need to be flexible in their price expectations to meet the market “.
Sydney’s liquidation rates have remained below 60 per cent since the first week of March, compared to a 68 per cent average over the decade, the CoreLogic record shows.
In Melbourne, settlement rates have remained at a low 60 per cent since the second week of April, below the decade average of 62 per cent.
Sales time has increased from an additional six days to 27 days in Sydney and an additional four days to 28 days in Melbourne.
Similarly, discount rates have risen to 3.3% in Sydney and 3.4% in Melbourne. Last year, Sydney sellers discounted 2.6% on average and 2.9% in Melbourne.