Sydney property prices have copped a pumping in 2018, falling 9.5 per cent since their peak in the middle of last year.
There are no green shoots to indicate any end in sight either, and the country’s largest city looks set to break its largest ever downturn record.
Here in Melbourne, things have been pretty stark too, with our city recording a price fall of 5.8 per cent for the year.
According to the latest CoreLogic home value index figures Melbourne dwelling prices fell by 1 per cent in November.
CoreLogic’s head of research Tim Lawless spoke to Australian Financial Review about the figures.
“For Sydney, 1.4 per cent (their drop in November) is the biggest monthly fall we’ve seen so far this downturn,” he said.
“The last time we saw a bigger monthly fall was back in 2004 but that was only one month and otherwise you’d have to go back to 1989 to see values falling faster than this.”
“If you look at Sydney’s largest downturn on record it was 9.6 per cent during the recession between 1989 and 1991,” he told AFR.
“It’s likely Sydney will set a new record in terms of the magnitude of price decline and the length of decline.”
Across the whole country house prices have dropped 4.1 per cent for the year and there’s little doubt the tighter lending environment is putting downward pressure on prices.
Investor home loans have been hit particularly hard and have grown at their slowest annual rate on record last month.
Owner-occupier loan growth has also struggled, crawling to a three-year low.
Clearance rates in Melbourne and Sydney are now hovering around the 35-40 mark, AMP Capital’s Shane Oliver told AFR.
“The deterioration of auction clearance rates would suggest the pace of decline in house price will accelerate and that’s what we’ve seen,” he said.
“It’s hard to see what would stop this downward spiral, it’s hard to see the Reserve Bank rushing to cut rates.”