Sydney home prices fell for the second-consecutive month and recorded the worst quarter in four years as a regulatory crackdown pushed up mortgage rates and dented affordability amid record prices.
Home values in Australia's largest city dropped 1.2 percent in December from a month earlier following a 1.4 percent decline in the previous month, data from property researcher CoreLogic Inc. showed Monday.
This is the first time since May 2013 that Sydney dwelling values have dropped for two straight months.
Home prices in Australia's most populous city fell 2.3 percent in the quarter ended December 31, making it the weakest performing capital city, CoreLogic said in an e-mailed statement. It is another sign of a cooling Sydney property market after prices climbed 44 percent in the three years to November.
"Throughout 2016, we may see further moderate value declines in Sydney and Melbourne," Tim Lawless, head of research at CoreLogic, said in the statement.
"However, considering population growth has remained strong in these areas and economic conditions are very healthy in these cities, we would be surprised if dwelling values fell materially before conditions start to level."
Melbourne prices dropped 1.9 percent in the quarter despite a 1 percent increase last month, according to the data.