Property prices across the nation fell 1.5% in November and are expected to continue their retreat into next year as foreign demand and salary growth wanes.
According to the latest home value figures by CoreLogic RP Data, combined capital city house prices dropped 1.5% over the month, after a very modest rise of 0.2% in October. Over the quarter to November, house prices are 0.5% lower and over the year to November, growth in house prices has dropped below 10%, recording an 8.7% annual rise.
Speaking to Bloomberg
, Chris Carr, a real estate agent in Sydney’s northwestern suburbs, said he has had to convince sellers to drop their price expectations on at least six homes in the past two months.
“Sellers have had to accept up to 10% price reductions,” he said.
According to Carr, this is due to a drop in demand from Chinese foreign investors.
“There is a lack of international buyers, particularly those with a Chinese background now, who were behind the price rise. Local demand is still there, but they are price-conscious.”
House prices in Sydney fell 1.4% over November, the CoreLogic RP Data figures reveal. This is the biggest drop since December 2010 and the first decline since May.
According to Bloomberg
, Chinese buyers treading with caution following domestic economic struggles and a devaluation of the yuan. A statement by Credit Suisse Group estimates that the appetite from Chinese investors for global property could drop by 30%.
, a principal at Digital Finance Analytics, told Bloomberg
he expects a significant drop in house prices next year due to weak salary growth.
“I expect prices to fall 5% to 10% next year assuming we don’t have an interest rate cut,” he said.
“Salary growth is subdued and is just not enough to support the housing momentum.”