Sydney Homebuyers Face $236k Equity Wipeout as ANZ Forecasts Peak-to-Trough Fall

ANZ's revised property price forecasts have cast a shadow over homebuyers in Sydney, warning of a potential peak-to-trough fall of 14.5%. According to Canstar analysis, this decline could wipe out $236,312 from the median house price, bringing it down to just under $1.4 million.

The Reserve Bank of Australia has left interest rates unchanged at 4.35%, offering no immediate relief to struggling borrowers. However, ANZ expects prices to begin recovering in the second half of 2027, when the RBA is forecast to commence rate cuts.

For those who purchased a Sydney median-priced house with a 5% deposit, Canstar estimates they could be in negative equity by approximately 9%, owing an estimated $128,322 more than the property's market value. In contrast, a buyer with a 20% deposit would retain an estimated 8% equity under the same scenario.

Data insights director at Canstar, Sally Tindall, warned that negative equity could strip borrowers of flexibility, making it difficult for them to sell their properties or refinance to a cheaper rate. She urged recent buyers with small deposits to focus on building up their financial buffers to keep their mortgages on track.

Tindall also noted that six-digit drops in property prices could create opportunities for prospective buyers, but cautioned against counting on the market recovering faster than predicted.