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Sydney Property Is Tumbling. Don’t Expect the Central Bank to Help

Houses stand in Sydney, Australia.

Photographer: Brendon Thorne/Bloomberg

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Sydney house prices are tanking. In Australia’s most populous city, values have fallen 10.1 percent -- even further than declines in the late 1980s when the country was on the cusp of its last recession. They’ve had a good run: Sydney was the epicenter of a national property boom that saw the average price of a home in the city soar past A$1 million ($720,000). Now, as tighter lending standards kick in and nervous buyers sit on the sidelines, the consensus is that values still have much further to fall.

Not just yet. For most Sydney homeowners, the downturn feels more like a pullback, with prices still 60 percent above where they were in 2012. With the earlier gains many of them enjoyed, few are underwater. The central bank isn’t panicking either: Reserve Bank of Australia no.2 official Guy Debelle pointed out in December that Sydney prices are still at the same level as September 2016 -- when the market was still running hot. The Melbourne market, which is also declining, is only back to levels seen in March 2017.