Property prices drop in 40% of Sydney suburbs: is now the time to buy?

The value of dwellings in around 40% of Sydney suburbs has fallen in the first three months of the year, according to data from CoreLogic. But is now the right time to purchase property?

The latest CoreLogic data shows that nearly two in five Sydney suburbs have experienced value falls in the first three months of 2022. Figures in the Australian Financial Review reveal that house prices in 189 suburbs, and unit prices in 165 suburbs have fallen.

In Melbourne, almost half of all suburbs have recorded a decline in value as well. House prices in 154 suburbs, and unit prices in 149 suburbs have recorded price falls.

Comparatively, Brisbane’s housing market recorded a rise in values in all suburbs in the same period, with only one suburb seeing a decline in unit values. And it was a similar story in Adelaide, with all house values continuing to grow, and only two suburbs recording a decrease in unit values.

The areas with the biggest price falls were found to be Beaconsfield in NSW, followed by Cremorne in Vic and Zetland in NSW.

Australian suburbs with the biggest price falls in the first three months of the year, according to CoreLogic:

1. Beaconsfield, NSW -7.2%
2. Cremorne, Vic -6.4%
3. Zetland, NSW -6.3%
4. Surry Hills, NSW -6.1%
5. Newtown, NSW -5.8%
6. Camperdown, NSW -5.7%

Interestingly, the biggest price falls were recorded in some of the most expensive areas of Sydney. Inner West suburbs may have topped the list for house value falls, but the Northern Beaches saw the biggest drops in unit values. Unit values in Curl Curl, Forestville and Queenscliff fell by 4.6%, 4.4% and 4.2% respectively.

If property prices are falling, is now the time to buy?

First home buyers, investors and upgraders may be following the housing market news carefully, waiting to identify the best moment to strike. There are some external factors to keep in mind that may influence your “ideal” time to purchase property.

Firstly, property prices have already begun to fall and there is a chance they may continue to do so. Many experts are predicting that property prices may decrease by as much as 10% in 2022, particularly if, and when, the Reserve Bank of Australia hikes the cash rate, as it has been forecast to do. A cash rate increase should see home loan lenders hike variable interest rates immediately, which will put further pressure on property prices to decrease.

Further, the eye-watering value of homes in capital cities and regional areas across Australia has outpaced wage growth for some time now. Purchasing a home has become incredibly unaffordable for young Australians in particular. At a certain point, this financial strain will result in a decrease in demand, which may result in further property price reductions.

However, it’s worth keeping in mind that it’s challenging to predict the bottom of any market or pinpoint a “perfect” time to buy property.

Ideally, the right time to buy a home is when you:

• Have saved up a 10-20% deposit,
• Are in a financially secure position (long-term employment, genuine savings, good credit score etc.),
• Have received pre-approval or full approval from a lender, and
• Want to buy a home.

It may be worth speaking to an expert, such as a mortgage broker, for more detailed advice around your specific financial situation and whether or not now is your best time to purchase property.

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