According to a recent report done by Domain, Sydney house prices have been dropping at a pace not experienced since a decade ago due to the negative forecasts concerning the current housing market.
The average discount on prices for homes around Sydney is 8.2% or approximately $87,134 – a discounted level not seen since 2009. As for apartments, the report stated an 8% discount or about $56,160 off of the original price, which has not been witnessed since 2006.
The region where vendors are slashing house prices the most is the upper north shore where they’ve recorded an average discount of 9.5% over the past six months to December. It’s a big price cut as the median house price in the region is $1.63 million. The discounted level equates to around $155,000 off of the original selling price.
Around Sydney and the east, property vendors reduced their prices by 9.3%, which equals to about a $200,000 discount at the $2.2 million median price. In the other parts of the city, prices in the inner west, lower north shore, and north-west went down by an average of 9%.
West and south-west Sydney, which have the most affordable real estate in the city, had the least discounted rate at around 7.2 – 7.3%. Property prices in this region have had sold $50,760 – $50,288 less than their original prices.
In general, discounting levels in Sydney have grown by 50% year-on-year, with the most significant discounting increase in the north-west, west, and Canterbury-Bankstown.
Low prices will help clear the backlog of properties
David Plank, ANZ head of Australian Economics, stated that the current discounting in Sydney house prices would help clear the backlog of properties on sale which in turn would result in pricing stability.
He said, “As that stock moves and new listings continue to decline, the available stock to buy will go down. When that starts to happen, that’s when you start to see stabilisation of prices.”
ANZ anticipates Sydney may have a peak to trough housing market drop of 20%. Mr Plank believes that if this happens as predicted, the increase in discounting in the city would most likely go down.
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