Property prices in these inner Sydney suburbs are now down 15%-20% annually

A tumbling property market could hurt investors in bank shares such as Australia & New Zealand Banking Group (ASX: ANZ).

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The latest property price data from Domain.com.au as the residential property website operated by Domain Holdings Australia Ltd (ASX: DHG) shows that predictions for house price falls of 15%-20% have already come true across some Sydney suburbs.

Sydney's house prices enjoyed a five-year bull market from 2012-2017 that saw prices rise around 70% in many suburbs, but according to Domain.com.au house and apartment prices have plunged in many suburbs over the past year.

For example in the harbour-side suburb of Rose Bay, house prices are reportedly down 20.4% over the past year, with the inner city Sydney suburbs of Redfern, Kingsford, Russel Lea, Glebe and Petersham posting house price falls of 14.5%, 9.5%, 17.4%, 14.7% and 13.4%, respectively, over the past year.

Other popular areas in Sydney's lower north shore and the city's south have also seen big house price falls.

For example, Lane Cove North house prices are reportedly down 15.5% over the year, while Sans Souci in the south has seen house prices fall 12.9% according to Domain.

Apartment or unit prices in some of these areas have fared just as badly with unit prices in Newtown down 17.1%.

Unit prices in other suburbs close to the city or beaches such as Bellevue Hill, Double Bay, Balmain and Erskineville have tumbled 15.2%, 15%, 12.9% and 11.8% respectively. While many areas in North Sydney like Milsons Point and Fairlight have seen double-digit falls in apartment or house prices.

According to Domain, Sydney's median house price fell $76,616 or around $1,400 per week over the year ending September 2018 in a result that could flow through to the Australian share market.

House prices in Melbourne, Perth and Darwin have also dropped over the past year in a warning sign for bank investors.

Bank shares, for example, have fallen over the past year as residential property lending is their core business. As asset values fall the chances of bad debts rise, while the risk remains that over-leveraged property investors may sell all together if the property price falls accelerate.

Over the past year shares in Australia & New Zealand Banking Group (ASX: ANZ) are down 17%, with Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB) shares down 21% and 22% respectively.

Motley Fool contributor Yulia Mosaleva has no financial interest in any company mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Ten smiling business people wave to the camera after receiving some winning company news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was an historic day for the ASX, with the market setting a new record.

Read more »

Three people in a corporate office pour over a tablet, ready to invest.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Broker Notes

Bell Potter says this ASX 200 stock can rise 100%+

Let's see which stock the broker is tipping as a buy to clients.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Broker Notes

Macquarie tips 28% upside for this ASX All Ords tech stock

Let's see what the broker is saying about this growth stock.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Fletcher Building, Johns Lyng, Pilbara Minerals, and Zip shares are charging higher

These shares are having a strong session on hump day. But why?

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Austal, Beach Energy, Perseus, and Platinum shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

A man looking at his laptop and thinking.
Broker Notes

Up 17% in 2025, how much more upside does Macquarie tip for Metcash shares?

Following Tuesday’s merger and earnings news, Macquarie changed its rating for Metcash shares.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Record Highs

Breaking: The ASX 200 just hit a new all-time high

Australian shares have exploded 16.8% higher in two months.

Read more »