Regions with biggest home price falls
HOME buyers will be able to secure properties this spring for an average of $50,000 less than they would have last year.
Figures published today showed the median sale price of a home, including units, houses and townhouses, has dropped 5.6 per cent over the past year to hit $855,287.
It had been well over $900,000 in mid-2017, according to the latest CoreLogic hedonic home value index.
The fall was bolstered by weak activity over the winter months, with the median falling 0.3 per cent over August and by 1.2 per cent over June, July and August combined.
Housing experts said those hoping to buy a home this spring would be able to capitalise on the best purchasing conditions in at least six years.
Buyers of higher-end properties and detached houses would be in an especially good position due to a drop in demand.
CoreLogic senior analyst Cameron Kusher said prices were falling faster at the higher end of the market because buyers were often only getting approval for smaller loans.
This meant they had to refocus their property searches to smaller properties or those in further-flung areas, removing competition at the higher end of the market.
Demand for cheaper properties and units was still strong because of robust activity from first home buyers, Mr Kusher added.
Varying demand for properties across price segments helped explain different performance in Sydney's submarkets and housing categories.
Although prices across the city as a whole fell 5.6 per cent for the year, the fall was higher for detached houses at 7.1 per cent and smaller for units at 2.2 per cent.
Prices also fell sharper in more expensive markets with high volumes of new housing stock such as the inner west, Ryde and the Hills region.
In the Ryde and Hills regions, the drop was just over 9.3 per cent for the year, while across the inner west it was 8.9 per cent.
Parramatta prices fell by an average of 7.4 per cent, Sutherland Shire prices by 8.7 per cent, and north shore and northern beaches prices fell 5.6 per cent.
Mr Kusher said prices would continue to fall throughout the year. "I don't think it's going to be a strong spring selling season anywhere in the country," he said.
It comes after Westpac last week became the first of the Big Four banks to raise interest rates out of cycle with the Reserve Bank, announcing a 14 basis point increase despite the official cash rate remaining on hold at 1.5 per cent.
"Westpac has boosted mortgage rates - you generally see lenders putting deals out for mortgage rates in spring, so I think they realise that," Mr Kusher said.
"There'll be a bit more stock out there to buy, and buyers in a better position than they've been in for a number of years.
"They need to go into purchasing with the knowledge values are going to continue to decline. But if they're buying a property they plan to live in for the next 10, 15, 20 years, they'll be fine."
BIGGEST MEDIAN PRICE FALLS (12 months)
Ryde -9.4%; The Hills -9.3%; Inner west -8.9%; Sutherland -8.7%; Blacktown -8.7%; Inner southwest -8%; Parramatta -7.4%