First sign of Sydney property prices falling

I’ve been in Sydney for the last few days and when I opened Saturday’s paper the headline that greeted me was: “First sign of Sydney property prices falling.”

Now that’s interesting, because I’d spent the previous few days with Metropole’s Sydney team and that’s not what they were experiencing in the market segments we’re active in.

Their view was that Sydney’s property markets are fragmented – some areas are still performing well, but there are some  worrying signs in secondary locations and outer suburbs.

So let’s be clear about what’s going on

Realtor giving house key to buyer in empty room

Sydney is still the strongest performing property market in Australia with overall firm price growth, but the heat is coming off and there are signs that in some regions, particularly many of the outer suburbs, that things are swinging from a seller’s market to a buyer’s market.

Currently, during the Spring season, there are more properties coming on the market for sale and with APRA tightening the screws on lending to investors, there are fewer investors out in the market, and those that are there seem to be a little more cautious.

Now this is a good thing…

The Sydney market was getting a little too hot earlier this year and setting itself up for a fall with very high auction clearance rates, property prices growing at unsustainable rates and around 50% of all home loans in Sydney being taken out by investors.

But things are slowly changing…

Data from the Domain Group shows prices growth at auction has slowed markedly in almost every region of Sydney.

Last Saturday’s auction clearance rate was in the low 70 per cents, and not the nearly 90 per cent it was in May.

But those levels are frenzied, unhealthy and unsustainable.

Sydney Auction Clearnace Rates


The fall in clearance rates had been the most severe in the outer suburbs.

Domain also found that in Canterbury-Bankstown prices growth was flat over August and in the south-west auction prices fell 1.2 per cent.

The weakening of auction prices coincides with the region’s plummeting clearance rate, which fell from 62.1 per cent in in July to 54.7 per cent in August.

However as  can be seen from the following interactive graphic some regions, particularly in the inner ring are still exhibiting strong price growth.

So price growth is slowing, but in many areas prices are still rising…


To me the message is clear…

Urban BuildingOf course it would have been good to buy and investment property in Sydney 2 or 3 years ago, but it’s not too late to invest in the Sydney property market, but now more than ever careful property selection is critical.

Less than 5% of properties on the market (in fact more like 1%) are what I would consider “investment grade”, and unless you buy the right property at the right price, you could regret your purchase.

Avoid the outer suburbs – I’ve explained why the inner suburbs will outperform in the future here.

And avoid off the plan properties – I’ve explained why off the plan purchases are a ticking time bomb here.

So what should you do?

If you’re looking for independent advice about where or how to invest, no one can help you quite like the multi award winning independent property investment strategists at Metropole.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.
Please click here to organise a time for a chat. Or call us on 1300 20 30 30.

When you attend our offices in Melbourne, Sydney or Brisbane you will receive a free copy of my latest 2 x DVD program Building Wealth through Property Investment in the new Economy valued at $49.

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit

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