For the first time since last year, dwelling prices in Sydney declined due to the impacts of the COVID-19 outbreak, breaking the city’s recovery streak, according to a report from CoreLogic.
The price recovery of houses and units in Sydney was abruptly halted over the second quarter of the year, falling by 2% and 1.9%, respectively. Nicola Powell, senior research analyst at Domain, said the June quarter is the first quarter to show the impact of the COVID-19 outbreak on dwelling prices.
"Sydney was in an upswing prior to this interruption, highlighted by the strong annual growth, up by 10.5% for houses and 7.3% for units," she said.
The median prices in Sydney currently sit at $1.14m for houses and $735,417 for units.
Powell said these price falls have been minimal due to several factors that helped support home values, including government stimulus, mortgage repayment holidays, and low interest rates.
"These are assisting many homeowners through economically challenging times and has kept distressed and urgent selling low. The risk to prices becomes greater once the stimulus measures cease and we face the fiscal cliff," Powell said.
While market confidence amongst buyers and sellers has already improved from the low levels in April, Powell still expects weakness in prices, with more sellers accommodating lower asking prices to push a timely sale.
"In June, 15.2% of sellers reduced asking prices, three times higher than the same time last year. The proportion of properties discounted is a leading indicator of price movement, evidence that further price weakness lies ahead," she said.