Sydney prices set for worst ever decline

Sydney prices set for worst ever decline

Sydney prices dropped 1.4 per cent in November, bringing the city's total peak-to-trough decline to 9.5 per cent - nearly on par with the previous record fall of 9.6 per cent between 1989 and 1991, when interest rates were in the high teens, unemployment was rising towards double digits and Australia was entering recession.

November represented the weakest monthly result for Sydney property since the global financial crisis with a 1.4 percent decline, ahead of 1 percent drop in Melbourne, the Australian Financial Review (AFR) reported on Monday.

"It does look like the rate of decline is starting to gather a little bit of momentum now, particularly as we start to see owner-occupiers becoming less active in the market" CoreLogic head Tim Lawless told the ABC.

Melbourne's property price falls have been less precipitous so far, with values down 1 per cent last month, and 5.8 per cent peak to trough. In Melbourne, house values fell by 1.2 per cent last month to be 7.3 per cent off since January.

It's the biggest fall since the record drop between 1989-1991, a period marked marred by rising unemployment and the threat of recession.

"Additionally, housing affordability constraints are more pronounced in these markets and rental yields are substantially lower, indicating an imbalance between rental values and dwelling values".

Australia's housing market has taken another leg down, with Sydney, Melbourne and Perth continuing to lead the declines.

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The premium end of the market is the biggest drag on the housing market.

"This will be especially the case for those markets where investment demand is most concentrated, and where housing costs are high relative to incomes, such as Sydney and Melbourne".

The two cities account for 55 per cent of the national market.

The good news in light of this statistic is that Australia now has record lows when it comes to interest rates, with unemployment hovering around the 5% mark, and general economic growth occurring.

Geelong house values were up 9.6 per cent for the year.

"The factors should help to support housing demand and offset a more material decline in dwelling values".

While values across Tasmania surged by their most for a year, the mainland price slide continued apace. Read it here or follow BusinessInsider Australia on Facebook.

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