PHOTO: Property prices in Sydney and Melbourne could have another 10-12 per cent to fall, according to a leading Australian economist. Photo: Josh Robenstone
Sydney and Melbourne property price falls could have a long way to go before bottoming out, with a “fear-of-missing” out mentality in the market becoming a “fear-of-not-getting-out” anxiety.
Tighter lending standards, poor affordability, rising supply and falling capital gains expectations could create the conditions for a top-to-bottom fall of 15 per cent in both Sydney and Melbourne’s housing markets, AMP Capital chief economist Shane Oliver predicts, with falls continuing until 2020.
Many investors may look to sell to avoid bearing the brunt of a several-year property price downturn, the economist warns.
Once leading the Australian house price boom, Sydney and Melbourne have reversed course, Domain Group and CoreLogic data show, with house prices in Sydney down between 4.5 per cent and 5.4 per cent from the peak, depending on how the median prices are calculated.
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