Strap yourself in, Sydney and Melbourne. According to experts and economists, you’re in for a bumpy ride.
House prices in Australia’s two largest cities are set to plummet 15-20 per cent from their peak, according to an ANZ Bank November forecast.
It’s a bold prediction, but they’re not alone. The majority (71 per cent) of Finder.com.au’s suite of experts and economists agree with the assessment.
“I have not been expecting a rate hike next year and have been forecasting a 20 per cent decline in Sydney and Melbourne property prices top to bottom,” AMP Capital chief economist, Shane Oliver said.
Oliver’s dire prediction is indicative of economists’ increasingly dramatic assessments, Finder’s insights manager, Graham Cooke observed.
“ANZ’s suggested 15 per cent drop would see $145,500 and $118,500 wiped off the average house price in Sydney and Melbourne respectively,” he added.
“A 20 per cent drop would see nearly $200,000 disappear from the equity of Sydney homeowners,” Cooke said.
What’s a 15-20 per cent fall in real terms?
It’s particularly concerning for recent home buyers, Cooke said.
“If we do see these types of price drops in the market, recent home buyers who laid down a 20 per cent deposit could see themselves in negative equity by the end of the year.”
Since its peak in July last year, Sydney’s housing market has slumped 9.5 per cent – in line with a similar decline seen during the 1989-91 recession, the latest CoreLogic figures reveal.
Melbourne’s market peaked in November last year and has since fallen 5.8 per cent.
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