Luxury suburbs in Australia’s two most populous cities are reporting falling property prices that have not been seen for nearly two years.
And with more interest rate hikes expected, this trend could continue.
See more information about the Australian real estate market in the video above
Watch the latest news on Channel 7 or play it for free on 7plus >>
Sydney and Melbourne have suffered the first quarterly fall in property prices in almost two years, before the Reserve Bank of Australia reduced its cash rate to 0.1%, the all-time low.
Sydney and Melbourne have suffered the first quarterly drop in property prices in almost two years. Credit: AAP
CoreLogic market analyst says data released on Thursday indicated the first drop in Sydney and Melbourne’s monthly growth rates in 22 months.
CoreLogic head of research Eliza Owen said expensive, more leveraged suburbs were sensitive to changes in credit conditions during a recession.
“Higher-income households tend to maintain more housing debt than income, as do real estate investors,” Owen said.
“That’s why the high end of the market can often be more sensitive to changes in interest rates or credit conditions, but this can also affect some other popular investment markets, such as downtown areas. the city”.
CoreLogic said four suburbs suffered a quarterly drop of at least 7 percent in home value.
The biggest drop in average home value was Beaconsfield, NSW, down 8.5%.
The next one was right on the road to Darlinghurst, with a drop of 8.3 percent. That’s more than $ 200,000 that wiped out the average suburban home price in just three months.
Surry Hills in NSW and Park Orchards in Melbourne fell 7.8 and 7.1 per cent respectively.
There are some cities, however, that are still experiencing a rise in values, despite the increases in interest that are being noted. Credit: DAN HIMBRECHTS / AAPIMAGE
Some cities, however, continue to see an increase in values despite the rising interest rates.
In Greater Brisbane, the average home price rose about $ 35,000 and the average unit price rose about $ 21,000 over the three months to April.
CoreLogic research director Tim Lawless said high-density areas tend to be the lowest-performing areas.
“We are seeing this trend more broadly, where the upper quartile of the market has softened more visibly than the middle and lower end of the market,” he said.
“These softer conditions come after stronger performance at the premium end of the market during the growth phase. Historically, more expensive housing markets tend to lead the upturn, but also to lead the fall, which that’s what we’re looking at right now. “
CoreLogic’s monthly home value index will be released on June 1st.