Sydney property prices climb 0.3% in February

SYDNEY: Property prices in Sydney, the bellwether of the Australian market, advanced for the first time in 13 months in February, in a positive sign for home values that have been under pressure from rising interest rates.

Prices in Sydney climbed 0.3% last month, their first increase since January 2022, while those in Melbourne and Brisbane slipped 0.4% apiece, CoreLogic Inc data showed yesterday. That sent the combined capitals index down 0.1%.

The property consultancy’s national home value index fell 0.1%, the smallest decline since May, when the Reserve Bank of Australia (RBA) began its policy tightening cycle.

The increase in Sydney was driven by the upper quartile, or higher-end properties, signalling a possible turnaround in the city’s market as the segment tends to lead both upswings and downturns, CoreLogic said.

Australia’s housing market has been in the doldrums for the past nine months as the RBA joined global counterparts in an aggressive tightening cycle to try to contain spiralling inflation.

The central bank surprised markets last month when it signalled it wasn’t done yet and expected further hikes to come.

That’s one of the reasons why Eliza Owen, CoreLogic’s head of research, said it’s difficult to call a bottoming out of the housing market.

“In fact, at this stage, we think there are considerable downside risks to the housing market’s performance in 2023, which could lead to a re-acceleration in housing value declines,” she said.

Owen also highlighted the repricing of low-fixed-rate mortgages at higher rates later this year and rising unemployment.

The RBA raised its cash rate to 3.35% in February from a record-low 0.1% in May as it tried to crush the hottest inflation in three decades. Money market pricing showed rates peaking at 4.31% this year, suggesting at least three more quarter-point hikes.

“There is

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