Sydney home prices fall further below peak

Sydney home prices have fallen for the third month in a row after peaking in early spring.

PropTrack’s latest Home Price Index released Thursday showed prices declined by an average of 0.29 per cent over December and are now 0.46 per cent below their peak in September.

The price of a typical Sydney dwelling, based on sales of units, townhouses and houses, is now $1,106m – about 3.4 per cent higher than it was at the start of 2024.

PropTrack attributed recent falls in prices to a rapid increase in the supply of available properties over the second half of 2024, coupled with interest rates staying at higher levels.

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Sydney’s house prices have fallen in December. Picture: Max Mason-Hubers

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The recent falls in Sydney prices came amid a national slowdown in the housing market, with national home values dropping for the first time in two years over December. The national fall was 0.17 per cent.

PropTrack economist Anne Flaherty said Sydney prices remained elevated despite the more “modest” growth over the past year.

“As the only capital city with a median sitting above $1 million, affordability remains a

significant issue in Sydney, particularly in an environment of persistently high interest rates,” Ms Flaherty said.

Houses had outperformed units for price growth across Sydney in 2024 according to PropTrack, with houses up 3.6 per cent versus the unit market which rose 3.0 per cent in the year.

Sydney Home Price Index growth in regions heat map. Source: PropTrack

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The median price for a house is $1.443m while a unit now priced at $816,000.

“This (growth) has led to an outperformance in Sydney’s more affordable regions, such as the outer west and south west,” Ms Flaherty added.

The outer west and Blue Mountains region experienced the most growth over the year and had risen by 6.83 per cent, now with a median home price of $921,000.

Across all of NSW, the Richmond Tweed area had seen the highest spike in its median price, now sitting at $875,000 up 7.83 per cent year-on-year.

Other regions that had seen significant growth included Blacktown (6.78 per cent), Parramatta (6.14 per cent) and South West Sydney (5.92 per cent).

Expert’s expect Sydney’s modest growth would continue into 2025, particularly if an interest-rate cut was to occur.

Toongabbie home with a guide of $1m.

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REA Group director of economic research Cameron Kusher said “with price growth moderating, stock levels rising, and the expected timing for interest rate cuts delayed, we anticipate weaker price growth compared to recent years.”