Sydney Housing Market Update [video] | February 2024

CEO Khai Intela
The Sydney housing market has shown signs of stability in recent months, with a slight increase of 0.1% over the past quarter and a significant 11.4% rise over the last year. This growth has been...

The Sydney housing market has shown signs of stability in recent months, with a slight increase of 0.1% over the past quarter and a significant 11.4% rise over the last year. This growth has been more pronounced for houses, with values increasing by 12.8%, compared to a 7.7% rise for units.

The rising prices have contributed to a $158,000 increase in the median house value and a $59,000 increase in the median unit value. This substantial gap between house and unit values has led to a potential shift in demand towards the medium to high-density sector. Unit values, based on the median, are nearly $570,000 lower in comparison to houses.

Sydney Housing Market Update Image: Sydney housing market update [source]

Here’s what’s currently happening in Sydney

During the peak of the Covid-19 pandemic, Australia experienced record-high house prices, with Sydney leading the pack as the most expensive city. However, the market has cooled off since then, resulting in significant declines across the board. Sydney's house prices have fallen by 14.7% year-on-year, reaching a new median price of $1.21 million. Units have also seen a decline of 10%, with a median price of $769,773.

Sydney Housing Market Update Image: Sydney housing market update [source]

This slowdown in the market is evident in the reluctance of both buyers and sellers. Buyers are exercising caution, as their spending power has decreased and they are no longer willing to compromise on their property choices. Meanwhile, sellers are hesitant to enter the market due to uncertainty, resulting in a decline in new listings.

Traditionally, the first half of March sees a surge in listing activity, but this trend did not materialize in 2023. Nationally, new listings in 'week 11' decreased by 27.3% compared to the previous year. Sydney's new listings are 13.2% below the average of the past five years and almost 23% lower than the previous year.

Sydney Housing Market Update Image: Sydney housing market update [source]

Despite the overall market decline, certain areas in Sydney continue to fetch impressive prices due to their desirability. A-grade homes and investment-grade properties remain in high demand, while properties of lower quality take longer to sell. Some suburbs are particularly sought after, with properties rarely becoming available for sale. Coastal and lifestyle suburbs also continue to attract strong interest from homebuyers.

At Metropole Sydney, we have observed strategic investors taking advantage of the current market conditions, while homebuyers are actively searching for opportunities to upgrade their properties. While property values are expected to decline further, A-grade homes and investment-grade properties are likely to outperform others.

Sydney Housing Market Update Image: Sydney housing market update [source]

Sydney is now a buyer's market

The housing market in New South Wales has shifted from a seller's market to a buyer's market. Buyers are no longer driven by the fear of missing out and are more cautious in their purchasing decisions. The decrease in borrowing capacity, coupled with reduced spending power, has contributed to this shift. As a result, sellers have had to adjust their pricing expectations to match the current market conditions.

However, despite these changes, buyer demand remains strong. Auction rates for properties that are being sold continue to remain high, indicating a revival in the Sydney property market. The city recorded a clearance rate of 69.5% during the third weekend of March, slightly lower than the previous weekend but still higher compared to the same weekend last year.

Sydney Housing Market Update Image: Sydney housing market update [source]

Sydney's Property Top Performers 2022

Despite the challenges faced in 2022, the Sydney real estate market displayed resilience. CoreLogic's Best of the Best report for 2022 highlighted several segments that outperformed others. Suburbs such as Bellevue Hill, Vaucluse, and Point Piper were among the top performers.

Sydney Housing Market Update Image: Sydney housing market update [source]

The best of the best in Sydney's property markets

As Australia's largest city, Sydney offers a diverse range of housing markets. Some segments have performed exceptionally well in recent times. A-grade homes and investment-grade properties continue to sell quickly, often within days of being listed.

Sydney Housing Market Update Image: Sydney housing market update [source]

Regional locations in New South Wales have also shown promising performance for houses and units, attracting both investors and homebuyers.

Sydney Housing Market Update Images: Sydney housing market update [source]

In conclusion, while the Sydney housing market is experiencing a decline, there are still opportunities for buyers and investors. The market conditions are diverse, and properties of higher quality continue to perform well. It is crucial to stay informed about the ever-changing market dynamics to make informed decisions in this challenging yet dynamic real estate landscape.

Sources:

  • Sydney Housing Market Update source
  • Sydney Housing Market Update source
  • Sydney Housing Market Update source
  • Sydney Housing Market Update source
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