In Sydney, house values have fallen the most in Beaconsfield, Darlinghurst and Surry Hills in the past three months.Property experts think the market is likely to fall further as interest rates rise and reduce buyers’ borrowing capacity.Property values have already fallen by as much as $200,000 in some neighbourhoods, new figures show, as pricey inner city suburbs lead the broader market downturn.
The drops have been slightly more modest in Melbourne, where the largest fall was in Park Orchards, near Ringwood in the city’s east, bucking the inner-city trend. House values there fell 7.1 per cent or $155,000 in three months to a median $2.014 million. He expects prices for more expensive homes to fall further as interest rates rise, adding the speed of rate rises and level to which they rise will be key for the property market.
Ultra-expensive properties – record-breaking mansions that perhaps fetch eight figures or more – are also less sensitive to interest rate rises, he said, as they are bought with old money or wealthy households more influenced by equity markets than interest rates. But these make up only a tiny fraction of sales.Buyer’s agent and chief executive of propertybuyer.com.