The new forecast breaks from other predictions that the market will rise, as higher rates for longer take a toll on home owners and on buyers’ affordability limits.
Property prices in Sydney and Melbourne are tipped to fall by up to 5 per cent next year, even as Australia-wide home prices are expected to record a moderate rise.
SQM Research founder Louis Christopher said the small-to-moderate rise in the capital city average would be thanks to booming property markets in the nation’s smaller capitals. “There will probably be a lag of two to three months before that happens. And most likely towards this time next year we will be recording rising prices in Sydney and Melbourne, but it won’t offset the falls we’ll see at the start of the year.”Years of high rates were pushing some home owners and investors to sell, Christopher said, which would push prices down.“We’re watching very closely the rise in distressed-listings activity,” he said. “It’s one of the key drivers.
“Our forecast is for 5 per cent next year, though I do agree with the divergence ,” she said.“It’s hard to see Sydney prices falling . I think small price falls in Melbourne are reasonable to expect,” she said. “In Sydney, I think we still have a situation of undersupply basically.” “You do get fatigue creeping in and there’s only so much that house prices can outpace wage growth when you have high rates.”
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