Residential property prices continue to fall in Sydney.
According to CoreLogic, prices in Australia’s largest and most expensive housing market fell by a further 0.2% last week, extending the losses over the past month to 1%.
The continued weakness came despite a noticeable lift in the city’s preliminary auction clearance rate last week, rising to 68.7% from 63.1% a week earlier.
Clearly, one week does not make a trend when it comes to price movements in the city.
With prices going backwards in Sydney, it saw annual price growth in the city slow to just 0.7% in nominal terms.
Taking into account inflation over the same period, prices in Sydney have now fallen over the past year.
Like the price movements recorded in Sydney during the week, many of the prevailing themes were seen across Australia’s remaining four mainland state capitals were also much the same.
CoreLogic said prices were flat in all locations, including Melbourne.
Over the past month, prices in capitals fell, albeit not to the same degree seen in Sydney.
In Melbourne, Adelaide and Perth they fell by 0.2%, with Brisbane the relative outperformer with a decline of only 0.1% reported.
Combined with Sydney’s 1% drop, it saw prices nationwide fall by 0.5% in average weighted terms.
Thanks largely to recent weakness in Sydney and Melbourne, price growth over the past year slowed to 2.8%, well below the double-digit percentage increases seen less than one year ago.
Of the mainland state capitals, prices in Melbourne grew by 7.7% over the year, outpacing gains of 2.4% and 2.1% in Adelaide and Brisbane respectively.
Perth, as has been the case for some time now, saw prices drop by 2.7% over the year.
Reflecting recent price movements across the capitals, the amount of housing stock up for sale continued to increase, rising by 1.1% to 100,659 from the same week a year earlier.
In Sydney, there were 23,365 residential properties up for sale, up 21.3% on one year earlier. In Melbourne and Canberra, where price growth is also slowing, total stock up for sale increased by a smaller 2.2% and 7.4% respectively.
Outside of the southeastern mainland capitals, the amount of stock up for sale decreased in all other cities, led by a sizeable decline in Hobart which fell by 38.4%.
In data released last week, CoreLogic found that it took an average of 40 days for a property to sell in Australia’s capital cities in December, up from 37 days one year earlier.
In Sydney, Australia’s largest and most expensive housing market where prices are now going backwards, it took an average of 42 days to sell, up sharply from 34 days in December 2016.
While not to the same degree, the average Melbourne sale time also lengthened, rising to 33 days from 29 days 12 months earlier.
In line with other housing market indicators such as house prices, auction clearance rates and housing finance growth, the increase suggests these once-hot markets have cooled over the past year, significantly in the case of Sydney.
CoreLogic said it was reasonable to expect that the number of days it takes to sell a property nationally will trend higher over the year, especially in the southeastern capitals.
“This is likely to occur in Sydney and Melbourne given that both cities have experience rapid rates of sale and strong growth in dwelling values over recent years,” it said.
“Vendors in those cities were market conditions are softening will need to be realistic about their pricing expectations. As properties take longer to sell, buyers will be more inclined to negotiate on asking prices and vendors may face higher competition from other properties listed for sale as inventory levels rise.”