Property prices have tumbled across all regions of Sydney, with house values in some areas falling more than 10 per cent over the year.

Overall the city recorded its largest annual drop in house prices since the global financial crisis, with the city-wide median falling 4.5 per cent over the year to June.

Sydney’s median house price now sits at $1,144,217, down from its peak of $1,198,456 in June 2017, according to Domain Group’s June Quarter House Price Report.

The median apartment price dropped 3.5 per cent to $737,080, its steepest annual decline since 2006.

“Sydney hasn’t experienced this level of fall for a decade,” said Domain Group data scientist Dr Nicola Powell.

“It’s a stark difference to what was occurring even just a year ago, when we had annual double-digit growth for both houses and apartments,” she said.

Houses in the upper north shore recorded the largest drop in value, falling 12.2 per cent over the year and shaving $230,000 off the median price.

Inner-west house prices fell 11.4 per cent year-on-year and 5.6 per cent over the quarter. Over the three months to June, the city and east took the biggest hit, recording a fall of 8 per cent.

“Nationally, we’ve been saying Sydney and Melbourne would see the sharpest falls, as they are the most highly leveraged and have had the strongest price growth” said ANZ senior economist Daniel Gradwell.

“This [same trend] is even playing out within the Sydney market. It really is the top end of the market that is seeing the greatest price falls,” he said.



The cool change has been felt by Darlinghurst vendors Mark and Deb Smith, who have been trying to sell their four-bedroom terrace since it was passed in at auction in October.

Initially on the market with a price guide of $3.5 million, the heritage-listed home is now for sale for $3 million after several price cuts.

“We’ve essentially reduced our expectations because that’s the market,” Mr Smith said.

With “cracks beginning to show” when they first listed their home, Mr Smith said the pair had “a slight inkling things might cool a bit” but they had been surprised by how much.

“The bigger the property the fewer the people who can afford it and who want it, so that’s been the issue for us,” Mr Smith said.

The pair had been caught in the falling market, according to selling agent Mark Foy, principal of Belle Property Surry Hills.

He said tighter lending restrictions meant there had been a drop-off in buyers, meaning those ready to purchase were facing less competition and had more time to pick and choose.

“Eighteen months ago people were just jumping into the market to get onto the capital growth train. Now there’s less of a frenzy.”

Mr Foy said two-bedroom, inner-city apartments ranging between $1.5 million and $3 million were still faring well because of their popularity with downsizers trading in their large homes.

Units in the city and east recorded the smallest price decline, at 1.1 per cent. Across town apartments in the city’s south and northern beaches recorded drops of 6.7 and 5.7 per cent.

The central coast was the only region in Greater Sydney to continue to see annual property price growth.

Dr Powell expected prices across Sydney to continue to decline, because stock levels, days on market and vendor discounting were all tracking higher, while clearance rates remained low.

“House and unit prices are now back to values seen at the end of 2016,” she said.

“But we’re not seeing a boom and bust scenario. We’ve had phenomenal growth, so it’s natural to see a pull back.”

While the market was currently in a “pretty weak spot”, Mr Gradwell said it was in line with ANZ’s revised forecast for a price decline of 10 per cent from peak to trough.

“Even where prices are now and even if they fall further, they’re still up maybe 40 or 50 per cent than where they were a couple of years ago,” he said.

With no “catastrophic collapse” expected Mr Gradwell said the price declines were actually good news.

“I’m thinking of all those first-home buyers out there in particular. The time taken to save a deposit is getting a little better.”