Buyers on a bargain hunt as Australia’s housing market keeps sliding
Prices across Australia fall for 11th month in a row – bad news for investors, but first-home buyers are biding their time
Five years ago banks were “falling over each other” to give out loans, says Sydney-based IT executive Karl Sice, who bought his first investment property 15 years ago. He currently has six properties in his portfolio across Sydney, Melbourne, and northern Queensland.
But after roughly six years of uninterrupted, breakneck growth, Australia’s house prices are falling, and the noises from the lenders have changed. The difference between now and five years ago, Sice says, is like “chalk and cheese”.
Sydney and Melbourne, the twin engines of Australia’s house price boom, are finally spluttering – thanks mostly to financial regulator Apra’s tightening of lending and the fallout from the banking royal commission.
Across Australia, prices have fallen for 11 months in a row. In Sydney, they are down 5.6 per cent over the year, and in Melbourne, they are down 2 per cent in the past three months – the worst drop since Christmas 2011. It wasn’t too long ago that prices surged 11 per cent in one year nationally and 20 per cent in Sydney.
And while it may not be a crash, it seems set to be a long slide. This week, Capital Economics predicted the coming fall would be the “longest and deepest” housing slump in Australia’s modern history.
