Sydney property values are tumbling at their fastest rate in almost 40 years as the Reserve Bank’s aggressive tightening of interest rates starts to bite | swrighteconomy
Sydney property values are tumbling at their fastest rate in almost 40 years as the Reserve Bank’s aggressive tightening of interest rates starts to bite, and even more rate pain is on the cards this week for home buyers.
Nationally, home values lifted by 28.6 per cent during the pandemic, but they have now shed 2 per cent since peaking in April. Despite the sharp fall, house values in Sydney are still 2.1 per cent up over where they were a year ago, with the median value at $1.35 million. Melbourne is up by 0.2 per cent, with the median house value sitting at $967,000.
But even they have not been immune to the impact of the RBA’s interest rate rises. Values are down by 1.1 per cent in Geelong over the past three months, by 2.2 per cent in Newcastle, by 4.4 per cent in the Illawarra and by 2.3 per cent across the Sunshine Coast.The impact on housing markets is likely to continue with the Reserve Bank board meeting on Tuesday. The Reserve is expected to lift the cash rate by half a percentage point to a six-year high of 1.85 per cent.
Commonwealth Bank chief economist Gareth Aird said last week’s inflation figures, which showed consumer prices growing at their fastest rate in 21 years, had solidified the case for another lift in rates.
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