Finder makes money from featured partners, but editorial opinions are our own.

Sydney slowdown leads to sluggish house price growth


house graph flatThe housing market has steadied for the month of August.

Results from the CoreLogic Hedonic Home Value Index show a relatively flat month for house prices in August as price growth slows. Capital city house prices grew by only 0.1% for the month, while regional dwelling values fell 0.2%.

CoreLogic head of research, Tim Lawless, said a flat month for Sydney contributed to the sluggish growth.

“We’re seeing capital gains in markets like Sydney, which were previously very strong, now being weighed down by affordability constraints and tighter lending conditions. The knock-on effect is a curb in investment credit growth and higher mortgage rates for investment and interest-only mortgages,” Lawless said.

Sydney saw no price growth for the month, with the quarterly rate of growth slowing to 0.3% from a peak of 6.3% in the October 2016 quarter. Melbourne showed more resilience, growing by 0.5% for the month and 1.9% for the quarter.

Lawless said affordability constraints were largely behind Sydney’s slowdown.

“If the current trends continue, by the end of the year we could see dwelling values across Australia’s two largest housing markets, Sydney and Melbourne, trend lower as they move through their cyclical peaks,” he said.

Latest home loans headlines

Image: Shutterstock

Find the right home loan now

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and 6. Finder Group Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Go to site