Data from electronic conveyancing platform PEXA shows that residential property settlements in NSW plunged 17.8% in the six months to 30 June compared with the first half of the 2021-22 financial year. Moreover, aggregate settlement values fell 11.8% from the first half, to $111.8 billion.
Commenting on the result, PEXA head of research Mike Gill noted that NSW has led the nation’s property decline:
“NSW saw quite a soft start to the year and it probably hasn’t recovered”…
“We’ve seen a more significant softening in NSW evidenced by the drop-offs in volumes and value down nearly 12 per cent.”
This data should come as no surprise given CoreLogic’s daily dwelling values index has dived 3.9% since the Reserve Bank’s initial 0.25% interest rate hike in early May, leading the nation’s price decline:
Sydney dwelling values have plunged following rate hikes.
In a similar vein, Sydney’s auction clearances have collapsed amid falling buyer demand, which given historical correlations points to falling values:
Sydney auction clearance rates have collapsed.
Because Sydney’s housing market is the most expensive in the nation relative to both incomes and rents, and Sydneysiders have the biggest mortgages, Sydney is most sensitive to the Reserve Bank’s aggressive rate hikes.
Accordingly, Sydney is leading the nation’s housing correction and should record the biggest peak-to-trough decline in values over this monetary tightening cycle.
