August 4, 2023
A Spring Overview of Real Estate in Sydney
With spring arriving, Sydney’s real estate market is looking set to bloom. As buyers tend to hold off on making purchases during winter, we are already seeing an increase in house prices thanks to this renewed demand. A 0.47% rise in August has driven annual growth of Sydney house prices to 5%, outpacing all other Australian cities except for Perth and Adelaide (7.57% and 7.41% annual growth respectively). With the median price for houses and units in Sydney at a staggering $1,056,000, this figure is only set to rise higher as spring momentum continues to propel the real estate Sydney market forward.
Sydney’s Booming Property Market
Explore the changes in Sydney’s real estate market this spring, with the price correction of Sydney’s housing that has rebounded from the lows of November 2022, elevated demand, an increase in properties for sale, and a range of investment opportunities.
Property Price Correction In Real Estate Sydney
Following a peak in February 2022, November saw a sharp drop in house prices by 7.04%, which had an effect on home buyers and sellers alike. The end of 2022 saw a rising cash rate that slowed the market, however with home prices increasing consecutively month-on-month this year, median home prices sit just 1.29% below the February 2022 peak, which is likely to be surpassed as head towards summer.
Thanks to slowing inflation, the Reserve Bank is set to keep the cash rate on hold for the third consecutive month, and with two-third of experts suggesting that the cash rate has hit a peak in the current rise cycle, there is renewed momentum in the market.
Supply & Demand For Sydney Real Estate
In spite of forecasts of property shortages in Sydney this year, Sydney recorded 2.3% monthly growth in the amount of new listings hitting the market. The 9.2% year-on-year increase of new listings combined with substantial demand across the city, sets the stage for an exciting close for real estate Sydney. For commercial builders and property developers in Sydney, the increased availability of listings at the moment could provide an excellent opportunity to focus on land acquisition for new property projects. However, Sydney’s material and labour shortages in construction have resulted in expensive renovations and long wait times for project delivery, which is likely to sway potential renovators to upgrade to a new property instead.
A 37% uptick in attendance at open for inspections (OFIs) since last summer shows a strong demand for properties, which could make spring the perfect time for investors to acquire new properties or rebalance their portfolios.
Investment Opportunities in Sydney
A combination of a variety of factors present a great opportunity for investors to enter the real estate Sydney market. With vacancy rate for high-quality rental properties predicted to reduce significantly, interest rates predicted to fall in 2024, and demand for rentals remaining strong, savvy investors could increase returns whilst also enjoying capital growth.
For luxury residential investment properties in particular, rental growth has increased substantially according to the Global Rental Index (PGRI) Q2 2023 from Knight Frank. With global residential rents surging at three times their pre-pandemic rate, Sydney is following suit with an increase of 13.1% in the last year, 8.7% in the last 6 months, and 3.2% in the last 3 months, suggesting that growth is likely to continue.
As spring unfolds in Sydney, it presents a promising opportunity for real estate investors. Following an almost complete correction of the lows in 2022, Sydney’s home prices have rebounded strongly, and the city is leading the way. The combination of a pause in interest rate increases combined with strong demand is set to propel Sydney home prices to all-time highs, offering an opportunity for investors and new-home buyers to take advantage of this, as well as giving sellers the opportunity to maximise their sale.
Get Help Buying Real Estate in Sydney
If you are looking to take advantage of the abundance of new listings in Sydney, HYG can
help. With a strong track record of success, having delivered a number of award-winning projects across Sydney, we can help you navigate Sydney’s real estate market to build your dream home or investment opportunity.
Whether you’re looking to buy, or to capitalise on the growing Sydney real estate market by developing your existing property, get in touch with our knowledgeable team today.