House prices in several high-end Sydney suburbs have recently seen significant declines, with areas where median prices sit at $2 million or higher experiencing drops of up to 7.5% over the past three months. CoreLogic data reveals this downturn as poor affordability and uncertainty over interest rates weigh heavily on demand.
Key Insights:
- Sharp Declines in High-End Markets: Northern beaches and inner south and west suburbs show the largest drops despite an overall 1.1% rise in Sydney house values.
- Borrowing Capacity and Economic Uncertainty: Christian Stevens, CEO of Flint Group, notes a sharp reduction in borrowing capacity by around 40%, making it harder for buyers to secure finance for high-priced properties.
“Borrowing capacity has been cut by around 40%, so fewer buyers can afford those properties,” says Stevens. “The combination of higher interest rates and increased cost of living has reduced the pool of potential buyers who can qualify for large loans.”
Suburbs Affected:
- Inner South and West: Forest Lodge and Glebe saw the most significant declines, with median values dropping by 7.5% and 7.1%, respectively.
- Northern Beaches: Areas like Avalon Beach and Palm Beach have also experienced notable decreases in house values.
Stevens highlights that even wealthy buyers in Sydney’s expensive suburbs are feeling the pinch of reduced borrowing power and higher monthly repayments.
For further details, read the full article on Australian Financial Review.
