News.com.au: Comnmon sense suggests things tend to get pricier as the years roll by — but Sydney homes are set get cheaper.
New market projections have revealed the median price of a Sydney apartment is set to fall by $30,000 over the next three years while the median house price will fall by about $27,000.
The price falls will turn Sydney into one of the weakest capital city housing markets — house prices are set to rise in every other capital apart from Darwin, according to the QBE Housing Outlook 2017-2020 report.
Unit prices, meanwhile, are forecast to fall in every capital outside of Hobart, Adelaide and Canberra due to rampant apartment construction creating an oversupply of housing.
Weaker activity from investors, who had dominated the market in recent years, would hold the key to Sydney unit prices falling, according to the QBE report.
“Capacity for investors to enter the market or pay higher prices is limited. This will put downward pressure on unit prices as investors retreat from the market,” the report said.
One of the factors that drove Sydney home prices so high over 2012-2016 was a massive housing shortage brought about by little residential construction from 2005 through to the years following the GFC.
That shortage still exists but is not as large as it once was. QBE forecasted that in 2020 Sydney will only be short of 12,900 homes needed to account for underlying housing demand, down from a 39,300 shortage at June 2017.
Another factor limiting prices from growing at high levels over the coming years is that they’re simply too unaffordable for most buyers, Mr White said.
The apartment sector will play a growing influence on the nation’s property market over the coming decades, Mr White added.
Continue reading at News.com.au…