Sydney’s median house prices are expected to drop below $1 million for the first time in four years, according to the latest Domain Q1 House Price Report. 

The latest median house price in Sydney was $1,027,962, which was down 3.1 per cent over the past three months and 11.5 per cent in the last 12 months. 

This price is expected to continue to decline, leading to a figure less than $1 million in the next three months. 

“It is yet to surpass the duration of the 2004 and 2006 slump but it is coming close to being the longest,” Domain senior research analyst Dr Nicole Powell said. "If the pace of quarterly decline remains, prices are likely to dip below $1 million in the coming quarter.” 

The last time Sydney’s median house price was below $1 million was in March 2015, with a record of $929,659. 

"Ultimately obtaining a home loan is more challenging and what that has translated into is there are fewer buyers in the market because buyers are having to meet more stringent lending conditions," Ms Powell said. 

"Some buyers are unable to get finance and if they can get finance their borrowing capacity has been reduced."

Sydney median house prices peaked in mid-2017 with the average price at approximately $1.2 million. However, this declined by 14.3 per cent as of Q1, according to Domain. 

Sydney median unit prices also fell, with two per cent decline over the last three months, and 6.5 per cent in the last 12 months. It is now at $696,935.