Arabic version: سيدني وملبورن تواجهان انخفاضات كبيرة في أسعار المساكن

Sydney and Melbourne are projected to experience some of the largest declines in housing prices in Australia, according to a report by Domain. The forecast suggests that house prices in Sydney could fall by as much as 7 percent, while Melbourne may see a drop of up to 8 percent over the next year. This downturn is attributed to rising interest rates and recent changes in tax policies that are impacting the housing market. According to ABC News, the typical house in Sydney could lose up to $122,000 in value, while Melbourne’s median house price might dip below the $1 million mark.

The analysis indicates that unit prices are expected to perform better than house prices in the coming financial year. First-home buyers are increasingly targeting units as more affordable options become necessary due to constrained purchasing power from higher interest rates. The report from Domain highlights that the housing market is becoming fragmented, with Sydney and Melbourne showing significant price falls, while other cities like Brisbane, Adelaide, and Perth are anticipated to see price growth.

The Reserve Bank of Australia has raised interest rates multiple times this year, with the current cash rate sitting at 4.35 percent. Domain’s chief residential economist, Nicola Powell, noted that the effects of these rate hikes are still being felt throughout the economy. While the Sydney, Melbourne, and Canberra markets are forecasted to decline, Brisbane, Adelaide, and Perth are expected to see positive growth, with units being the only affordable option for some buyers.

Despite these projections, the overall situation is not entirely bleak for current homeowners. A report from Cotality revealed that 96 percent of residential property resales in the first quarter of the year resulted in profits for sellers, the highest level in 21 years. The median profit for these sales reached a record $377,000, indicating that many sellers are still benefiting from previous substantial value increases. However, the report warns that declining home values may impact resale profits in the future, particularly for properties bought near the market peak.