The more expensive suburbs near the city suffer the biggest drop in house prices and more interest rate hikes are expected (Pictured is Oxford Street in Sydney's inland Darlinghurst)

Sydney’s suburbs, where property prices fall by $200,000 in just three months

The more expensive suburbs near Australia’s major cities are suffering the largest drop in house prices and more interest rate hikes are expected.

Sydney and Melbourne have already suffered the first quarterly decline in property prices since mid-to-late 2020 – before the Reserve Bank of Australia cut spot interest rates to a record low of 0.1 percent.

In the other markets, where general prices are still rising, some upscale suburbs with seven-figure price tags are now suffering a decline, with inner-city homes in Hobart, Perth and Brisbane fall in value.

In the three months to April, the median house price in Sydney fell 0.3 percent to $1.417 million.

But the quarterly decline was even more pronounced in the more expensive postcodes.

The more expensive suburbs near the city suffer the biggest drop in house prices and more interest rate hikes are expected (Pictured is Oxford Street in Sydney’s inland Darlinghurst)

Eliza Owen, CoreLogic’s head of research, said wealthier suburbs that benefited from the boom were more likely to experience a bigger downturn.

“These are also areas that have seen some of the most extraordinary gains during the cycle, and historically have chimed in other parts of the market,” she said.

In Beaconsfield, just 3 miles south of Sydney city centre, average house prices have fallen 8.5 percent, or $168,263, to $1,808 million in three months.

As late as October, it experienced an annual price increase of 33.7 percent, but this has slowed to just 2 percent.

Nearby Darlinghurst saw the median home price drop 8.3 percent, or $206,944, to $2,282 million.

The suburb’s annual growth rate has slowed from 26.9 percent in October to just 2 percent in April.

Neighboring Surry Hills saw median home prices fall 7.8 percent, or $180,196 in three months, to $2,131 million.

In October, the suburb experienced an annual growth rate of 28.9 percent, but it has since slowed to 2.9 percent.

Darlinghurst saw its median home price plummet 8.3 percent, or $206,944, to $2.282 million.  The suburb's annual growth rate has slowed from 26.9 percent in October to just 2 percent in April (Pictured is Oxford Street during the Sydney Mardi Gras)

Darlinghurst saw its median home price plummet 8.3 percent, or $206,944, to $2.282 million. The suburb’s annual growth rate has slowed from 26.9 percent in October to just 2 percent in April (Pictured is Oxford Street during the Sydney Mardi Gras)

Sydney, Melbourne in worst decline since 2020

SYDNEY: Down 0.1 percent in April, down 0.3 percent in the quarter to $1,416,960

MELBOURNE: Down 0.2 percent in April, down 0.5 percent in the quarter to $1,000,926

BRISBANE: Up 1.7 percent in April, up 5.9 percent in the quarter to $880332

ADELAIDE: Up 1.9 percent in April, up 5.6 percent in the quarter to $676,546

PERTH: Up 1.2 percent in April, up 2.5 percent in the quarter to $578,751

HOBART: 0.4 percent down in April, up 1.4 percent in the quarter to $793,723

DARWIN: Up 1.3 percent in April, up 3.2 percent in the quarter to $576,149

CANBERRAE: Up 1.3 percent in April, up 2.5 percent in the quarter to $1,070,220

Source: CoreLogic median home prices in April 2022

Melbourne also suffered a quarterly decline, with the median home price falling 0.5 percent to $1.001 million.

But in the much more expensive suburbs of Park Orchards, 14 miles northeast of the city, prices fell 7.1 percent in the three months to April, or $155,061 to $2,014 million.

Balaclava, 7 km south of the city’s southeast, prices have fallen 5.1 percent or $84,174 to $1,563 million.

Port Melbourne’s median home price fell 5 percent, or $94,544, to $1,778 million.

Hobart is also slowing with a median price increase of just 1.4 percent in the quarter to $793,723.

But in Mount Stuart, 1.5 miles northwest of the city center, house prices have fallen 4.8 percent or $48,720 to $962,142 in three months.

West Hobart’s median price fell 4.5 percent or $49,911 to $1,059 million.

In Brisbane, the overall market continues to grow, with mid-quarter prices rising 5.9 percent to $880332.

But in Nundah, 12 km north of the city, the average house price has fallen 2.4 percent or $29,129 to $1,168 million.

In Perth, median prices rose 2.5 percent during the quarter to $578,7541.

But in ultra-upmarket Peppermint Grove on the Swan River, home to billionaires Andrew Forrest, Gina Rinehart and Kerry Stokes, median home prices have fallen 1.5 percent or $41,184 to $2,668 million.

The declines continued into April before the Reserve Bank raised interest rates by a quarter of a percentage point to 0.35 percent — the first rate hike since November 2010.

Port Melbourne's median home price fell 5 percent, or $94,544, to $1,778 million (pictured is a view from the nearby Melbourne Star Observation Wheel)

Port Melbourne’s median home price fell 5 percent, or $94,544, to $1,778 million (pictured is a view from the nearby Melbourne Star Observation Wheel)

Westpac expects the RBA to raise interest rates seven more times over the next year to 2.25 percent, which would be the highest cash interest rate in eight years.

Wealthier zip codes, where borrowers typically make more money, don’t have the same kind of mortgage stress as interest rates rise.

But Ms. Owen said buyers in higher-end areas also borrowed a lot more, leaving upmarket zip codes more prone to a bigger downturn.

“Higher income earners tend to hold more housing debt than their income, and that includes real estate investors,” she said.

“Therefore, the high end of the market can often be more sensitive to changes in interest rates or credit conditions, but this can also affect some other popular investment markets, such as inner-city areas.”

In the three months to April, the median house price in Sydney fell 0.3 percent to $1.417 million.  But in higher-end postcodes, the quarterly decline was even more pronounced (shown is the view over Sydney Harbor from Dawes Point)

In the three months to April, the median house price in Sydney fell 0.3 percent to $1.417 million. But in higher-end postcodes, the quarterly decline was even more pronounced (shown is the view over Sydney Harbor from Dawes Point)

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