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Sydney auction clearance rates have been under 50 per cent, normally an indicator prices will fall, for seven straight weeks. Picture: Monique Harmer<\/p>\n
The median price of a Sydney dwelling, based on sales of units, townhouses and houses is now $1.222m, a decline from $1.253m in February, according to PropTrack\u2019s Home Price Index.<\/p>\n
REA Group economist Anne Flaherty attributed the falls to higher interest rates and the fallout from tax changes announced in the May federal budget, including restrictions on negative gearing and capital gains tax reforms.<\/p>\n
\u201cLower investor demand has softened prices,\u201d she said. \u201cThere is also an expectation among home buyers that prices will continue to drop and that\u2019s made a lot of them hesitant to buy.\u201d<\/p>\n
Recent drops in home values could prove problematic for those who used the Australian Government 5 Deposit Scheme at the start of the year as prices only need to fall marginally more for them to slip into negative equity, Ms Flaherty said.<\/p>\n
Being in negative equity, where the homeowner has a mortgage larger than the value of their home, would mean they would be unable to settle their home loan debt if ever forced to sell.<\/p>\n
MORE: Jackie O\u2019s cunning $30m exit plan amid Kyle payout<\/a><\/p>\n Realestate.com.au economist Anne Flaherty<\/p>\n Multiple real estate groups are now forecasting further falls in prices.<\/p>\n Modelling from SQM Research forecast a 9 per cent fall in Sydney prices over the calendar year, while ANZ has predicted a drop of up to 8.4 per cent. Commonwealth Bank has predicted a 6 per cent fall.<\/p>\n \u201cNegative equity is an increased risk,\u201d Ms Flaherty said. \u201cIf any of these buyers are struggling to pay a mortgage, it will be concerning.\u201d<\/p>\n PropTrack figures showed Sydney\u2019s market slump, which originally started among higher priced sales, last month spread to more affordable areas.<\/p>\n Prices in the inner south west, which includes much of the St George area and Canterbury-Bankstown, dropped by 3.28 per cent over the past three months.<\/p>\n Parramatta prices fell by an average of 2.4 per cent over the period, while prices in Ryde and the southwest, which includes Liverpool and Fairfield, dropped by about 2.4 and 2.1 per cent, respectively.<\/p>\n MORE: How David Jones signed its own death warrant<\/a><\/p>\n Ray White chief economist Nerida Conisbee<\/p>\n Ray White chief economist Nerida Conisbee said government tax changes could raise the risk of negative equity for first-time buyers.<\/p>\n Ms Conisbee said the changes have reduced investor demand at the bottom end of the market, fuelling widespread value falls in the kinds of areas where many first-home buyers entered the market with 5 per cent deposits, supported by the government\u2019s guarantee scheme.<\/p>\n \u201cGovernment has messed around with the bottom of the market,\u201d she said.<\/p>\n \u201cThe problem is they expanded (the guarantee) scheme in October, which pushed up prices at the bottom end.<\/p>\n \u201cThen government went and reformed taxes for investors in the Budget, which has pulled down prices at the bottom end.\u201d<\/p>\n By introducing one policy that pushed up prices for first-home buyers and another that later pulled them back down again, government created a lot of the negative equity risk, Ms Conisbee explained.<\/p>\n Experts said demand has fallen since Treasurer Jim Chalmers announced landmark tax changes in the Budget. Picture: Martin Ollman<\/p>\n \u201cConfidence among first-home buyers has taken a real hit,\u201d she said. \u201cThe (risk) is if any of the first-home buyers lose their jobs and have to sell.\u201d<\/p>\n A spokesman for Minister for Housing Clare O\u2019Neil downplayed the concerns about negative equity, pointing to Treasury modelling showing house prices \u201cwill be 2 per cent lower\u201d than they would otherwise be. They said: \u201cMost 5 per cent Deposit Scheme participants are ahead on their mortgage and defaults under the scheme are vanishingly rare.\u201d<\/p>\n SYDNEY REGIONS BY 3- MONTH PRICE CHANGE<\/p>\n Inner South West -3.28%<\/p>\n Ryde -2.75%<\/p>\n Eastern Suburbs -2.70%<\/p>\n Inner West -2.47%<\/p>\n Parramatta -2.40%<\/p>\n South West -2.10%<\/p>\n Blacktown -2.05%<\/p>\n Northern Beaches -2.04%<\/p>\n North Shore -1.51%<\/p>\n Sutherland Shire -1.34%<\/p>\n Outer South West -1.16%<\/p>\n Hills District and Hawkesbury -1.03%<\/p>\n Outer West and Blue Mountains -0.90%<\/p>\n Central Coast -0.40%<\/p>\n CBD and Inner South -0.05%<\/p>\n Source: PropTrack<\/p>\n MORE: Australia\u2019s $85bn savings crisis exposed<\/a><\/p>\n<\/p>\n
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