Sydney home prices have fallen for the fourth consecutive month but at a slower rate than earlier in the pandemic.
The median home price inched down 0.5 per cent over August, nearly half the rate of decline recorded over July, according to CoreLogic’s latest hedonic home value index published Tuesday.
The median price of a Sydney dwelling is now about $860,000 – 2.6 per cent lower than it was four months ago but 9.8 per cent higher than a year ago.
Eased lockdown restrictions were a factor in the buoyant Sydney market, with Melbourne recording much larger price drops.
The median home price in Melbourne fell 1.2 per cent for the month, with prices down 5.6 per cent over the past four months.
Prices were largely unchanged for the month across Brisbane, Adelaide and Perth.
Housing experts said Sydney price falls were lower than last month due to relatively strong upsizer activity and fewer homeowners putting their properties up for sale.
This meant home buyers were competing for a small supply of properties and home sellers did not have to offer large discounts to push through sales.
Bank support for homeowners such as mortgage deferral periods and lower interest rates also meant there was yet to be a widespread rise in distressed sales that would otherwise drag down prices.
CoreLogic head of research Tim Lawless said the housing market remained insulated from the weaker economic conditions but there was still a high risk of further drops in prices.
“So far there has been no evidence of urgent or distressed listings starting to pile up,” he said.
“This could potentially change as fiscal support starts to taper at the end of September and distressed borrowers taking a repayment holiday reach their six month check-in period around the same time.
“The timing of these two events could be the catalyst for a gradual rise in distressed listings … it could signal that vendors will need to offer up greater discounts in order to sell their home.”
Mr Lawless said there were likely to be fewer spring home sales this year if the uptick in distressed sales did not eventuate.
Spring is normally one of the busiest periods for the market for both listings and sales.
“Advertised listing numbers and home sales (are) trending in the opposite direction: new and total listing numbers are reducing,” Mr Lawless said.
“Through the COVID pandemic to-date, active listing numbers have remained extremely low, demonstrating both a lower than average amount of fresh stock being added to the market, and a strong rate of absorption.”