Property listings have soared ahead of demand in recent weeks, heralding the hints of a buyer's market for the first time in more than 18 months.
Nearly one five sellers in Sydney's premium suburbs slashed their prices by around 7.4%, or $203,315, according to new analysis from Domain.
It comes as property listings increased heading into the end of the year and property prices continued to hit buyer's budgets.
Sellers in premium suburbs and inner-city areas led the pack in discounting their properties, Domain said.
Its data showed that more than one in seven vendors in Sydney's eastern suburbs have reduced their asking prices by around 7.6% on average - or $273,600 off the median price - and a similar proportion in the inner west sliced asking prices by around 5.2%.
In North Sydney and Hornsby, and in Melbourne's inner south asking prices were similarly revised down by up to 6.1%.
The number of property listings under 30 days had jumped 76% in the northern beaches and by 74% in the eastern suburbs since August, data from SQM Research shows.
Meanwhile, stock levels had more than doubled in the inner-west and leapt 158% in the inner south-west during the same period.
Nicola Powell, chief of research and economics at Domain said the suburbs that had recorded meteoric price increases in the past 12 to 18 months were now among the highest proportion reducing asking prices.
The northern beaches notched up some of the largest gains in house prices in the past 12 months, soaring by 46.1%, while the eastern suburbs grew by 27.4%.
"These premium markets in Sydney and Melbourne have led the upswing and seen exceptional growth through the housing boom, and they are much further along the price cycle," Powell said.
"So this is a real indication of where we are in the price cycle because the premium end is now slowing."
Australia's most expensive housing markets gained almost 60% over the course of 2021, with the country's property market surpassing $9 trillion in value as of December.
Michelle Marquardt, head of prices statistics at the ABS, attributed the continued solid growth in residential property prices to "record low interest rates, strong demand and low levels of stock on the market", factors that have prompted an explosion in property prices globally.
Across the board, Australian capital cities recorded rises in residential property prices over the past 12 months, with Sydney home to nine of the top 10 suburbs with the highest median house price nationwide.
Bellevue Hill, Vaucluse, Double Bay, Tamarama, Rose Bay, Dover Heights, Bronte, Mosman, and Longueville rounded out the list of most expensive suburbs, followed by Toorak in Melbourne's east which took the tenth place.
Sydney's Bellevue Hill was the most expensive suburb in Australia this year, racing ahead of last year's leader Darling Point, with the suburb's median house price rising $2.28 million over the year to $8.74 million - an average of $6,255 a day.
Powell said more vendors were likely to cut their asking prices to get a sale in coming weeks.
More than one in 10 vendors in Sydney's Ryde, inner south-west and Sutherland have reduced their asking prices and a similar proportion of vendors in Melbourne's outer east have also lowered their expectations.
"Listings have gone up substantially in recent weeks, which means buyers can now take their time as they have more options and no longer have to battle it out," Powell said.
"It made buyers more wary about overpaying, so I think sellers have to be more realistic to meet that expectation on pricing."
Australia's big four banks have aligned in predicting house prices will hit a ceiling in 2022 before simmering into a correction period in 2023.
After the Reserve Bank of Australia begins its tightening cycle, the Commonwealth Bank of Australia forecast the cash rate could lift to 1.25% by the third quarter of 2023, which could trigger an "orderly correction" of house prices by as much as 10%.
Gareth Aird, head of economics at CBA, said in November that at some point the tailwind of lower mortgage rates on prices will seize up unless there are further cuts in interest rates.
"The Australian housing market is in the twilight of an incredible boom that has been fuelled by record low mortgage rates," Aird said.
"The phenomenal lift in prices is not over yet given dwelling prices are still rising briskly in most capital cities. But near term indicators of momentum coupled with the recent move higher in fixed rate mortgages suggest that conditions will moderate from here."
The post Sellers are lowering prices as property listings soar, prompting the first signs of a buyer's market in 18 months appeared first on Business Insider Australia.