The Daily Telegraph JANUARY 19, 201811:00PM
Apartment prices have been falling so rapidly across Sydney’s residential construction hot spots that units are losing more in value each week than their owners earn in wages.
Exclusive data obtained by the Daily Telegraph revealed the biggest falls were recorded in the Sydney Olympic Park precinct and parts of the inner west and Parramatta.
Median unit values in these regions dropped by up to $145,000 over the past year, a rate of $2788 for each week and the equivalent of the average lawyer’s base income.
The falls have come amid a wider slowdown in the Sydney housing market following nearly three years of unprecedented price hikes.
Unit construction in NSW keeps climbing Source: CoreLogicSource:Supplied
At $895,000, the median price of a home across Sydney as a whole is currently about $14,000 (2.1 per cent) lower than it was at the start of October, with most economists agreeing that prices peaked in July.
Suburbs between the inner west and Parramatta recorded even larger price drops due to the large supply of new units and softer demand from investors, who comprised the majority of buyers in 2016.
Realestate.com.au chief economist Nerida Conisbee said the price falls were inevitable.
“Parramatta in particular has been getting a lot of new units, but there is only so much you can keep building until there’s an oversupply and prices start decreasing,” Ms Conisbee said.
“Units may have also hit prices buyers can no longer afford, so they’ve backed away.”
The suburb of Mortlake, just opposite Olympic Park, had the biggest drop in median apartment values for the year.
Suburbs between the inner west and Parramatta recorded even larger price drops due to the large supply of new units.
Typical apartment prices fell by $145,000 to hit $890,000 — an average loss of $2788 for every week of the year, according to the CoreLogic data.
Apartment values have been falling by $1490 per week in Rydalmere, while unit prices in neighbouring suburb Ermington have been dropping by $1057 a week.
The impact of rampant home building in Sydney Olympic Park has also been felt in the surrounding inner west region.
Concord unit values fell by an average of $538 per week, while apartments in Annandale, Balmain, Rozelle and Forest Lodge fell by $697 to $1634 per week.
Most homeowners in these areas would not have felt the pinch from the value falls if they purchased more than a year ago because prices went up so rapidly in the years preceding the current slowdown, Ms Conisbee said.
EDITORIAL: It’s time ... prices have dropped
This meant the value of their homes remained higher than their purchase prices — for now.
“At this stage, prices are still returning to equilibrium,” Ms Conisbee said. “I think we’d have to see a real change in the economy and unemployment for there to be a (collapse) in prices, although there may be more adjustments.”
Falling prices was good news for Romy Dellacorte, 38, who is looking to buy her first home.
When she started looking for a first home she was overwhelmed and enlisted buyers agent Rod McLoughlin from the Buyer’s Agency Sydney.
“It is definitely good news, most of my friends, we are all in the same boat, it seems impossible to buy in Sydney,” she said.
First home buyer Romy Dellacorte. Picture: Jonathan NgSource:News Limited
Ads by Kiosked
“It has been impossible to get a foot in the market, the fact prices have dropped is great,” she said. “Most of my friends are in the same boat — it seems impossible to buy in Sydney.”
First-home buyers Prayash Khadgi-Shahi and Manisha Sthapit were able to snap up a two-bedroom unit at Homebush for $644,000.
“The apartment is just over a year old and, compared with prices my friends paid recently, it was a fair bit cheaper,” Mr Khadgi-Shahihe said.
Prayash Khadgi Shahi and his wife Manisha are the proud new owners of an apartment at Homebush. Picture: David SwiftSource:News Corp Australia
Billionaire apartment king Harry Triguboff admits “the market is going down”. He has put one of his hotels on the market to finance his new Meriton developments. “I am not getting enough sales,” Mr Triguboff told The Australian.
Mr Triguboff said offshore buyer demand had been falling over the past year and blamed the raft of taxes aimed at foreign buyers, including increased stamp duty costs.
Terry Ryder, founder of research group Hotspotting.com.au, said the risk of further price falls had made Parramatta and the Sydney Olympic Park precinct “risky” markets to invest in.
The regions were the only two Sydney areas which recently made a list of Hotspotting’s 10 “no go zones”, the markets where property buyers were most likely lose money.
In making the list, the regions joined other markets around the country with a heavy oversupply of units such as inner Brisbane and inner Melbourne.
Approvals for new units in those markets have recently begun to slow but CoreLogic figures showed NSW approvals have been steaming ahead.
Close to 70,000 new NSW homes were approved in the September quarter, well above the 40,000-odd approved in Victoria and the roughly 25,000 approved in Queensland.
CoreLogic analyst Cameron Kusher said the approval levels showed NSW had an “insatiable appetite” for constructing new units.
Homeowners uncertain of how the changing market may affect their sales prospects should keep in mind market conditions varied wildly across Sydney regions, according to buyer’s agent Rich Harvey of Propertybuyer.
“Parramatta and Sydney Olympic Park still have more land for building more units so are prone to oversupply,” Mr Harvey said. “This isn’t the case in many areas closer to the city and beaches which are still seeing some price growth.”
Are you tired of traditional investments such as banks and bonds that only offer 1-6% per year which do not keep pace with the real inflation.
Do you want to become rich the way over 60 % of self-made millionaires did?
According to PT. B.A.L.I., Bali's leading real estate expert for the past 13 years, who have thousands of satisfied clients, this is the “Second best time to purchase Bali Real Estate this century”.
They believe that recent changes in real estate laws for foreigners allowing them to obtain control for more than a normal lifetime and up to 70% bank financing is creating a huge new demand for Indonesian and Bali Real Estate.
Coupled with the fact that Bali Real Estate has just undergone the first correction in modern history with prices down as much as 50 % this has set the stage for *increases of 20% to 100 % the next three to five years.
Free Bali Real Estate Seminars:
Whether you are a buyer, seller, broker, agent, investor, lessor or renter you can benefit from attending one of our two free Real Estate Seminars in Bali this month.
At these seminars PT. B.A.L.I’s Canadian President, Lawrence, a 21 yr. Bali resident who is married to Azizah, a fully Licenced Notaris will review the most recent real estate laws for Indonesians and Foreigners in detail.
Then they will also discuss the Past, Present, and Future of Indonesian Bali Real Estate.
Free Seminar Schedule:
Bali, Emerald Villas, Jl. Karangsari, # 5, Sanur, Bali, Indonesia.
- Wednesday - Jan. 31st. 6:30 PM - 7:45 PM
- Saturday - Feb. 3rd. 2:00 PM - 3:45 PM.
- Thursday - Feb. 15th.. 6:30 PM - 7:45 PM
- Saturday - Feb. 17th. 2:00 PM - 3:45 PM.
At these seminars you will learn about:
- The Past, Present and Future of Bali and Indonesian real estate.
- Why a recent official clarification of foreign ownership laws allows foreigners to totally control Indonesian properties for up to 80 years without leases?
- Why Indonesian banks will now lend money on Indonesian Real Estate to foreigners, therefore proving leverage and additional huge profits?
- How to avoid legal problems and make sure a property is safe. How to avoid complicated real estate laws affecting Indonesians married to foreigners.
- Why this is the second best time to buy this century.
- Where are the best locations to buy for maximum profits?
- What type of properties will offer the best investment potential of *10% to 20 % per year?
- Discover how you can sell your property fast for the highest prices and lowest commissions on a brand new web site designed after the largest most successful real estate site in America with high tech search features.
- An opportunity for a free listing on B.A.R.E. First Class Beachfront property at almost 50% discount.
- A Quality 5,000 m2 Bali Hotel with 12 bungalows, 3 pools and Restaurant for only $588,000.
- Low cost properties with Luxury Villas starting as low as $138,000 for a three bedroom 650 m² 3 bedroom, 4 bath with private 9 mtr. Pool. Ridiculously low priced ocean view building lots starting as low as $25,000 for 500 m².
Free Parking. Seating is very limited for these free seminars so please avoid disappointment and make reservations A.S.A.P. Click Here For a Reservation
Or Email: email@example.com or Tel: Office: 62-361- 284069 For Bahasa English 62-8123814014 – Bahasa Indonesia or 62-8123632177