Sydney has shown the largest falls for houses and units in Australia over the financial year and CoreLogic expects there will be plenty of buyers with negative equity.
Sydney has run the hardest and is now softening the most with nine of the top 10 worst-performing regions for dwelling values over the 2017-18 financial year.
"With Sydney values falling over the past year, values have been dragged lower virtually throughout the entire city," CoreLogic's Tim Lawless said, "In fact, the Central Coast is the only region of Sydney in which values haven't fallen over the past financial year."
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Among the worst performing Sydney spots are Ryde, down 7.4 per cent and the Inner West, down 7.2 per cent. Not even the relative affordability of the western Sydney housing markets – which have seen good first-home buyer activity – could save areas such as Blacktown and the Inner South West which dropped 6.5 per cent and 6 per cent respectively.
Best and worst dwelling prices for 2018 financial year. Source: Corelogic CoreLogic
One of the key reasons is the exodus of foreign buyers.
First National West Ryde's Nick Matulic said that while sales were still being transacted vendors were meeting the market as there were fewer buyers.
"The owners who have adjusted price have sold – it's about meeting the market. Foreign investors were buying a lot of townhouses and duplexes but that market has dried up now. It's been like that for about 18 months."
In the Inner West suburbs of Rozelle, Newtown and Leichhardt, foreign buyers were less prevalent during the boom in prices but those areas have still suffered price falls.
Cobden and Hayson's Ben Southwell said the stricter lending criteria from banks was probably the main reason for the pull back on prices.
"Finance has had a huge impact. The stricter criteria on serviceability means some lenders are lending about $200,000 less than what they would have last year."
He said there were still buyers and campaigns were still being launched, such as a five-bedroom, three-bathroom newly built home in Leichhardt which he expects will sell for between $2.9 million and $3.2 million.
With clearance rates at their worst level since 2012, meeting buyers' expectations is the focus for agents.
Only Darwin recorded a larger overall fall in values than Sydney suburbs during the financial year.
The best performers included Hobart and Melbourne's and Brisbane's western suburbs.
Hobart jumped 12.7 per cent while west Melbourne was up 6.6 per cent and Brisbane's west up 5.4 per cent.
ReMax Realestate's Liza McKilliam, based in Brisbane's west, said she had surveyed the Kenmore and Chapel Hill market and noticed that there were almost half as many sales between March and June this year compared with last year but that the average price was $100,000 higher.
"[The number of homes for sale] has slowed a bit but we still have plenty of buyers. I had 28 groups through one house on the weekend.
"I have been doing real estate for more than 20 years and every time Sydney slows Brisbane takes off."
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