Property prices have been falling faster in Sydney’s priciest regions while holding firm or even rising in some cheaper areas during the coronavirus pandemic, new research showed.
CoreLogic’s latest hedonic home value index revealed prices across the city as a whole fell by an average of 0.4 per cent over May – the first monthly drop in close to a year – but falls were larger in pricier regions.
The Sutherland Shire and Hills district recorded the largest falls in property prices for the month at 1.5 per cent and 1 per cent, respectively. They were also the only regions where home values fell over April.
Both markets have traditionally attracted upsizing families due to a high concentration of larger houses and many of the properties are priced well above $1.5 million – roughly 70 per cent higher than the Sydney median.
The Hills district also has a significant supply of new properties on the market, particularly in areas such as Kellyville, which has given home seekers more choice and room to negotiate prices down.
Price drops ranging from 0.6-0.9 per cent were recorded in some of Sydney’s other premium markets, including the northern beaches, inner west and north shore.
CoreLogic head of research Tim Lawless said price falls in most city regions were only marginal but more expensive areas tended to get bigger drops because values surged just before the COVID-19 crisis.
“The markets that led the last (surge) are recording bigger falls … they had the biggest run up in values and it may not have been sustainable,” he said.
The eastern suburbs – Australia’s priciest housing market – was an exception to the trend, with values rising 0.5 per cent over May.
McGrath-Coogee agent Nicholas Wise said home sales in the area remained hotly contested because few of the buyers worked in industries that had been directly affected by the economic fallout of the pandemic.
Many were doctors, lawyers and business owners who were confident about their income security in the years to come, Mr Wise said.
“There are still a lot of people in our area with big money to spend,” he said.
Values in the Ryde region, where the median property price is $1.4 million, increased by an average of 0.4 per cent over May.
This was largely the result of a major drop in detached house listings, which meant homebuyers were competing for the same stock.
The only other regions that recorded a rise in values were markets where prices tended to be under $700,000.
There was an average rise in prices of 0.5 per cent in Sydney’s outer southwest, which includes suburbs such as Campbelltown and Camden.
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Central Coast prices, which are typically below $650,000, rose by an average of 0.2 per cent.
Prices in the outer west and Blue Mountains region fell 0.2 per cent, while in the Blacktown region the fall was 0.4 per cent.
Mr Lawless said he doubted there would be an acceleration in price falls over the coming months because too few homes were being listed.
“The supply of (available) properties is low. This appears to have insulated prices,” he said.
The longer-term outlook was less certain, he added. “It will all depend on the economy … if there is further weakness in the labour market and we see an increase in distressed sales it would affect the property market.”
Ray White managing director Dan White said the property market was in better shape than anticipated.
“The sky did not fall in during the shutdown phase,” Mr White said. “We know there’s a lot of pent up demand from buyers looking to transact.”
“CoreLogic’s data (is) consistent with what we are seeing first hand in the field. Our data shows such strong buyer demand, with increasing numbers of registered bidders which is supporting prices.”