Louis Christopher: Sydney house price falls will accelerate

Sydney's housing market is on the brink of a double-digit price decline, according to Cotality's daily dwelling values index, which shows a 9.3% drop since the market peak on March 19th. The trend in value growth has also reversed, with values falling by 1.4% over the past month. Louis Christopher, founder and managing director of SQM Research, predicts that Sydney's final auction clearance rate will plummet to an all-time low, as it stood at just 27.1% in the most recent week. This marks the lowest point in Sydney's housing market since the COVID-19 pandemic.

Christopher took to X (Twitter) to declare that Sydney housing prices will now be falling at an accelerated rate compared to just two months ago. This grim outlook comes in the wake of the Reserve Bank's recent decision to raise interest rates for the fourth time in a single year. Sydney's housing market is the most unaffordable in the nation, with the average mortgage consuming 30.7% of household income. This makes Sydney's homeowners particularly vulnerable to further rate hikes.

First home buyers in Sydney have been especially hard hit by the declining prices, with over 28,000 individuals taking advantage of the Albanese government's 5% deposit scheme introduced last October. Unfortunately, the downward trajectory of Sydney home prices, coupled with the prospect of four more interest rate hikes this year, has put many first home buyers at risk of negative equity and extreme mortgage stress.