Sydney Housing Market Facing a 15% Fall in House Prices

Announcement posted by Performance Property 26 Nov 2024

25 November 2024: Sydney's housing market is on the brink of a potential 15% decline in median house prices, according to recent analysis by Performance Property, a leading property advisory firm specialising in high-income clients with annual earnings of over $500,000. After peaking at a rolling 90-day (R90) median house price of $1.45 million in May 2024, the market is showing growing signs of stress as affordability hits at crisis levels, and stock volumes rise dramatically - up by 40% over the past 10 months, according to recent data.

David McMillan, Director at Performance Property, warns of significant downside risk for the Sydney market. "Our research indicates that the Sydney housing market is under substantial pressure," McMillan said. "Unprecedented levels of unaffordability, compounded by sustained high interest rates and surging stock volumes, are making it increasingly difficult for vendors to sell and for buyers to enter the market. We're now seeing properties take longer to sell, with early signs of vendor discounting, clear indicators of a softening market."

Performance Property's Affordability Index underscores the severity of the situation, currently sitting at an all-time high of 87%. Previous index peaks of around 67% preceded periods of negative price movement, highlighting the high affordability barrier confronting potential buyers. "This affordability crisis, along with ongoing rate pressures, increased days on market, and rising vendor discounting, presents the most significant downside risk we've observed in recent years," McMillan added.

Sources: Performance Property, CoreLogic.

According to SQM Research, Sydney's stock on market (SOM) increased from 25,000 in January 2024 to over 35,000 in October 2024, a substantial 40% rise that reflects changing dynamics in the city's property sector.

McMillian warns that the Sydney market's prospects remain bleak, despite isolated areas of resilience. "The usual drivers of growth such as traditional debt, are sidelined in this high-interest environment, and whilst cashed-up buyers, intergenerational wealth transfers, and new money coming into the market from international buyers will play a role, these factors are limited in scope. They simply won't offset the broader market risks."

Source: SQM Research, Total Property Listings: Sydney, NSW (sqmresearch.com)

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Media Contact

Maree Schneiders
maree@performanceproperty.com.au

0411 446 484

About Performance Property

Performance Property is a leading property advisory firm specialising in data-driven research, analysis, acquisition, sales, and management of residential and commercial properties across Australia. Our team empowers clients with strategic market insights and offers tailored solutions to enhance property investments. We also provide expert property management services to ensure the ongoing success and value of clients' assets. By combining in-depth market knowledge with a comprehensive suite of services, Performance Property helps investors and property owners navigate the complexities of the market to maximise returns, manage risks, and achieve long-term success.