It’s easy to get the impression that prices are falling everywhere, because media provides very shallow and generalised analysis of what’s happening in property markets.
When you dig a little deeper and look behind the generalised figures, you find that there are markets within markets.
And the reality right now is that the Top End of our big city markets is the sector that is falling – and it’s dragging down the general median price figures for Sydney, Melbourne and Brisbane, creating the impression that prices are falling across the board.
They’re not – it’s the millionaire suburbs that are dropping while the affordable markets, where most people live, continue to perform well.
There’s no doubt the frantic heat we saw in markets last year has dissipated in many locations – with some notable exceptions.
Buyers are no longer throwing ridiculous prices at owners in the desperate hope of securing something, anything, they can get their hands on.
In many cases, including Sydney and Regional NSW, sales activity was fading in the second half of last year and then dropped more dramatically in the March Quarter of this year – long before interest rates started to rise.
This generally has started to flow through to the price data and we’ve seen in recent months declines in median house prices in some of the capital cities, particularly the biggest ones.
But, as is always the case when looking at median house prices, it’s important to keep in mind that it is a broad figure and not representative of what is happening in every suburb or property type within a region.
Analysis of the latest data shows that it is generally the upper echelons of the market experiencing drops in values, particularly in Sydney, Melbourne and Brisbane.
Many of those wealthy suburbs, which achieved extraordinary growth during the past two years, are now experiencing the greatest declines, although values still remain higher than pre-Covid levels.
We’ve seen it happening in areas like Byron Bay where property price doubled in the past three years.
That market is now fully priced and well past its peak, as too are Sunshine Coast top end suburbs including Noosa, Sunshine Beach and Minyama.
The Sunshine Coast, after three years of stellar price growth, has been fading since late last year and is undoubtedly past its peak – for now.
The biggest price falls in Sydney have been in locations where you typically pay $3 million or $4 million for homes – such as the Northern Beaches and the Waverley LGA, which includes the Bondi suburbs.
CoreLogic data shows that in every capital city it is the top quartile where prices have dropped the most.
House and apartment prices in the most expensive quartile of suburbs have fallen 6.2% from their April peak while the lower quartile of the market has shown no appreciable decline.
That’s why simply looking at overall median house price figures for big cities can be deceptive.
It can give a false impression that values across a whole area are falling when really it is the Top End that’s coming off the boil – and dragging down the overall figures for area.
The cheaper areas are still performing well and look set to continue doing so, because buyers are all kinds are increasingly targeting the more affordable locations.