The remarkable rebound in Sydney house prices rolls on, with CoreLogic’s daily dwelling values index soaring 0.8% from its trough on 7 February:
Sydney dwelling values are now down 13.3% from their peak, according to CoreLogic.
The quarterly rate of decline has moderated sharply to only -1.3%, down from -5% on 7 February just prior to the rebound:
The rebound in Sydney home values has come despite the Reserve Bank of Australia’s (RBA) two consecutive 0.25% interest rate hikes on 8 February and 8 March.
In fact, the 10 consecutive rate hikes from the RBA has reduced borrowing capacity by around one-third and added around $1500 a month in repayments on a $750,000 mortgage:
Logically, the RBA’s continued tightening should have impacted Sydney’s market the most, given it has the most expensive housing and the most indebted households.
Yet counter intuitively, Sydney is leading the rebound at the 5-city level, followed by Melbourne:
Whether this means the housing correction is over remains to be seen, given the RBA could tighten further and the pending fixed rate mortgage cliff.
But consensus forecasts (including from yours truly) of a 15% to 20% peak-to-trough decline in Aussie dwelling values look to be in trouble.
