Declining Sydney property prices a forecast for the rest of Australia, experts say

As interest rates rise, Sydney house prices are dropping and experts say it is a “bellwether” for what is about to happen across the rest of the country.

After hitting record highs in January, Sydney housing values ​​have fallen 1.5 per cent, according to CoreLogic data.

While the cost of buying a home in Australia’s largest city remains 22.7 per cent above pre-COVID levels, the decline in value is getting bigger by the month, driven by rising interest rates.

Digital Finance Analytics’s Martin North said Australia already had a “housing affordability crisis”.

“I actually think the next evolution is falling prices, there is a very significant risk of seeing significant falls,” he said.

“Housing prices are way too high relative to income — debt to income ratios of six, to nine times are not acceptable.”

Mr North said Sydney was a bellwether for what would soon hit the rest of the country.

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