Why Sydney property prices could be a warning to the rest of the country

As interest rates rise, house prices in Sydney are falling and experts say this is an ‘indicator’ of what is about to happen in the rest of the country.

After hitting record highs in January, home values ​​in Sydney have fallen 1.5%, according to data from CoreLogic.

As the cost of buying a home in Australia’s largest city remains 22.7% higher than pre-COVID levels, the fall in value is steepening month-on-month , due to rising interest rates.

Martin North of Digital Finance Analytics said Australia was already experiencing a “housing affordability crisis”.

“I actually think the next move is price declines, there’s a very significant risk of seeing significant declines,” he said.

“House prices are far too high relative to income – debt-to-income ratios of six to nine times are not acceptable.”

Mr North said Sydney was an indicator of what was soon to hit the rest of the country.

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