Staggering house price drop predicted

PHOTO: House prices

House prices have risen sharply in the past 12 months, but it coud be “the beginning of the end” for Australia’s property boom.

The Commonwealth Bank is predicting overheated house prices will plunge in Sydney — and across Australia.

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Median house prices in the Harbour City have spiked 23 per cent in the past year, but could drop nearly $200,000 by the end of 2023, analysis by the Commonwealth Bank shows.

The bank’s dwelling price projections predict the median house price across Australia will drop by eight per cent in 2023.

This includes a three per cent drop this year and a nine per cent fall next year in both Melbourne and Sydney.

That means Sydney’s median house price could plunge from $1,410,128 to $1,213,686 — a drop of $196,442.

In Melbourne, prices could also fall from $998,356 to $880,871.

Sydney house prices have boomed in the past 12 months. Picture: NCA NewsWire / Christian Gilles

RateCity.com.au research director Sally Tindall said prices in Australia’s two biggest cities were beginning to falter amid buyer fears of purchasing at the peak, higher fixed rates and stricter serviceability tests.

“This could be the beginning of the end for the current property price peak in Australia’s two biggest cities,” she said.

Ms Tindall acknowledged that falling property prices “can be stressful” for any buyers who have bought at the peak, but it would be an exciting opportunity for aspiring homeowners.

“Property price drops will provide a reprieve for people hoping to get into one of Australia’s many overheated property markets, however, would-be first home buyers should crunch the numbers before they pop the champagne,” she said.

CommBank predictions show house prices could drop significantly by the end of 2023. Picture: NCA NewsWire / John Gass

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