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Money Here's how the latest downturn in Sydney and Melbourne property prices compares to those seen in the past

04:21  17 april  2018
04:21  17 april  2018 Source:   businessinsider.com.au

Sydney home prices continue to slide

  Sydney home prices continue to slide Australian home prices fell modestly in early April in weighted terms, reflecting continued weakness in Sydney. Sydney home prices continued to fall in early April, continuing the trend seen in recent months.

Sydney and Melbourne home prices have fallen 2% and 0.6% respectively so far in 2018. Compared to prior downturns , the latest price correction has been far modest and shorter than most seen in the past .

Australian capital city home prices have been falling in recent months, according to data from CoreLogic, a performance in stark contrast to that seen for much of the past decade. Significantly softer market conditions in Sydney and Melbourne largely explains the recent weakness

Sydney and Melbourne home prices have fallen 2% and 0.6% respectively so far in 2018.© AAP Image/Joel Carret Sydney and Melbourne home prices have fallen 2% and 0.6% respectively so far in 2018.

Home prices in Sydney and Melbourne are now starting to decline following years of strong growth.

According to CoreLogic, the median dwelling price in Sydney, Australia's most expensive housing market, has fallen 2% this year, adding to the modest losses recorded in late 2017.

Many are now pondering as to what will happen next?

Some think further losses are on the way as tighter lending restrictions, affordability constraints, weak household income growth and increased supply act in tandem to keep prices under pressure.

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Here ’ s how the latest downturn in Sydney and Melbourne property prices compares to those seen in the past . 4. Hundreds of Australian organisations have been affected in a global campaign of Russian cyber attacks that targeted government agencies, businesses and critical infrastructure.

That largely reflects a 3.3% slide in Sydney ’ s median home price over the past 12 months, along with a sharp deceleration in Melbourne with prices According to CoreLogic, there are currently 112,994 properties listed for sale across Australia’ s capital cities, up 8% on the levels seen 12 month earlier.

Others, however, suggest the recent weakness is unlikely to last for long, pointing to strong employment and population growth as factors that will help to support prices in the near future.

While past performance is not indicative of future returns, if history is any guide, the recent weakness could extend for some time yet.

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  Australia needs to get smarter about catering to its growing population Australia's population grew by 395,600 in the 12 months to September 2017. Sydney and Melbourne property prices rose by 72% and 53% respectively in the five years to mid-2017.According to data released by the Australian Bureau of Statistics (ABS), Australia’s population grew by 395,600 in the 12 months to September last year, representing an increase of 1.63%.

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The Commonwealth Bank has revealed that the downturn of property prices in Sydney and Melbourne will continue at least in 2020. Sydney and Melbourne property prices will continue to decline, says CBA. That saw annual price growth turn negative for the first time since 2012.

As seen in this chart from Cameron Kusher, Research Analyst at CoreLogic, posted on Twitter today, the latest downturn in Sydney is both shorter and more modest than most price corrections seen in the past.

a close up of a map© Business Insider Australia

Although each was driven by different factors, be it higher interest rates or global factors, it suggests the recent downturn is not all that unusual.

The same could also be said for Melbourne's latest price correction, far smaller and shorter than that seen in Sydney to this point, with the latest decline very modest in comparison to those seen in the past.

a close up of a map© Business Insider Australia

Right now, the declines in both Sydney and Melbourne appear to be moderating, especially in the former, compared to those reported late last year and in early 2018.

While that suggests that prices may soon start to level off, or even increase, in the months ahead, as both charts clearly demonstrate, that's no guarantee that the bottom of the price cycle has been hit.

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Prices in these cities have been falling for several months. Many forecasters expect the downturn will continue for quite some time yet. As seen in the table below from CoreLogic, clearance rates in both Sydney and Melbourne remained Here ’ s how Sydney ’s currently compares to prior years.

“ Sydney unit values are up 1.9% over the past twelve months, while house values are down 3.8%. In contrast to the recent trends seen in Sydney and Melbourne , CoreLogic said prices for Lawless says recent trends suggest the worst of Australia’ s housing market downturn may now be over.

You can follow Cameron on Twitter here

NOW READ: A history of Australian housing market downturns, in one chart

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Australian home prices are lower than a year ago .
Australian home prices are now lower than a year ago, in average weighted terms. According to CoreLogic, prices across Australia's five mainland state capitals fell by 0.1% over the past year in average weighted terms, a result largely reflecting outright declines in Sydney and a sharp slowdown in Melbourne.

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