A unit within this Thornleigh apartment block sold in August for $90,000 less than the price the vendor paid in 2014.

An upper north shore suburb that has long been prized as a leafy, family-friendly haven has this year become the epicentre of Sydney’s real estate slump.

New pricing data has revealed the suburb of Thornleigh has recorded the sharpest contraction in prices across Sydney, with unit prices plummeting by a staggering 31.4 per cent over the past year.

It was the largest drop over the period among Sydney suburbs with more than 50 property sales, according to analysis of realestate.com.au figures.

Dwelling prices across Greater Sydney are down an average of about 4.9 per cent from their November peak.

Thornleigh’s stunning unit price drop has wiped away years of real estate gains. Units in the area are now an average of 23 per cent cheaper than they were in 2023, and a 4.4 per cent cheaper than in 2021.

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Leichhardt auction

Buyer demand has fallen across Sydney as a whole. Picture: Jane Dempster

Falling prices within the area have come amid a release of larger numbers of unit stock in nearby suburbs such as Epping, Hornsby and Waitara.

That listings pipeline may have given buyers more choice and eased pressure on buyers to bid up prices to get the apartments they like.

Thornleigh’s unit market has also been impacted by government plans to wind back negative gearing perks for new landlords from July 2027, a policy announced in the May federal budget.

It should be noted that Thornleigh’s detached house market has fared much better, with the median house price declining only 1.7 per cent over the same period.

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REAL ESTATE GENERICS

The north shore’s house market remains very tightly supplied, but unit listings across the region have been higher in pockets. Picture: Gaye Gerard

The suburb’s falls have followed a continuing correction across the national housing market, with a range of lending institutions recently downgrading their forecasts for home prices over the next year.

HSBC is among the latest to revise expectations downward. Its chief economist Paul Bloxham recently revised a previous estimate of a 8 per cent peak-to-trough drop in national prices to 13 per cent.

Mr Bloxham told media higher interest rates – including another expected hike in rates this year – would push down housing demand, while government tax changes were also having an effect.

Economists

HSBC chief economist Paul Bloxham said another rate hike would push down prices more. Picture: Martin Ollman

Macquarie Group has also downgraded its Australian house price forecast.

Macquarie chief economist Ric Deverell now predicts a 10 per cent peak to trough fall in house prices, down from a previous forecast of a 5 per cent national fall.

“What started as a correction at the top end of Sydney and Melbourne has now spread to the smaller capitals and the bottom end of the market as well, as tax changes see investors retreat,” Mr Deverell told media.

ANZ has forecast a 14.5 per cent peak to trough drop in Sydney prices. The last Sydney peak has been identified as November 2025.