After years of strong growth, Sydney property prices look like they may have topped, at lest in the current price cycle.
Having fallen 0.1% in September, it looks like prices fell by around 0.5% in October, according to recent data from CoreLogic.
While higher mortgage rates, affordability constraints and tighter restrictions on foreign and local investor borrowing have likely contributed to the recent slowdown, there’s another factor that help explain why prices are softening.
The number of properties up for sale has increased sharply over the past 12 months, lifting by 19.5% to 25,625, according to CoreLogic.
Like any market, prices are dictated by supply and demand, and with supply up and demand a little softer, it’s likely contributed to the recent moderation in prices.
The increase in listings also suggests that many vendors think the price top is in.
Listings are also lifting in Canberra and Adelaide, and to a lesser degree in Brisbane.
In contrast, listings in Melbourne and Hobart — the two capitals with the fastest price growth over the past 12 months — have fallen over the year, substantially in the Tasmanian capital’s case.
Perth and Darwin, where prices have been weak for several years in the wake of the mining infrastructure boom, have seen listings fall heavily over the year, perhaps a sign that vendors in those cities think the bottom of the price cycle may be nearing.
CoreLogic will release updated house price data for October on Wednesday, November 1.