The cooling summer
The market seems to be cooling off. Alice Stolz, Domain’s national marketing editor, writes in a weekly column that:
“The temperature is dropping at auctions and the mood is shifting in the country’s biggest property markets. Everybody from Federal Treasurer Josh Frydenberg to the local butcher has an opinion on not if, but when interest rates will rise. The ‘tighten your belts’ narrative has started.”
It’s not just Ms Stolz saying the market is cooling. According to the ABC, Sydney house prices had a fall in Feb of 0.1% which is the first fall in 17 months. Core Logic’s Head of Australian Research Eliza Owen is quoted as saying this was the equivalent of a fall of about $1000 for a median priced home. Considering Sydney house prices this is barely a drop in the ocean, so probably don’t start planning an urgent purchase yet.
Real Estate.com.au discusses which areas are slowing more quickly than others. The article suggests that any area with runaway growth last year might be feeling more of the slowdown this year, having perhaps reached a perceptual ceiling of affordability / sanity. This includes the northern beaches, eastern suburbs and inner west. In fact, according to this article, over a quarter of Sydney suburbs have a median house price in excess of $2 million, so a ‘cooldown’ or a ‘fall’ in prices is a relative topic.