NSW Market View Q32008 Email Version1

1) Sydney's housing market has experienced declines over the past year due to high interest rates, reduced population growth, and diminishing capital growth. The median house price in Sydney fell 2.31% in 2008. 2) Housing construction has fallen significantly due to high costs and a downturn in the residential market. This sector typically accounts for 5-6% of the state's economy. 3) While further price softening is expected in the short term, interest rate cuts and an ongoing shortage of housing supply indicate the conditions for an upswing in the residential market in the near future.