10.11.2023 Local News

Market Report: Spring 2023

Market Report: Spring 2023

With Spring in full bloom and Summer on the horizon, we explore what’s happening in the market.

It’s hard to believe, but there are now just two months left until Christmas. As 2023 draws to a close, we explore what buyers need to know about the Eastern Suburbs real estate market.

1. 2023 has been a good year for eastern suburbs property

So far, this year has been another very good one for Eastern Suburbs property. Since bottoming out in January, Sydney’s median dwelling price has lifted 10.6%, according to CoreLogic. Houses have performed even better, rising 10.9%.

That’s an incredible statistic when you consider that it comes on the back of the most rapid interest rate rises we’ve ever seen.

While interest rates may have been higher in the 1980s and early 1990s, the RBA has never before lifted the official cash rate by 4% over 12 months, as it did between mid-2022 and mid-2023. In the process, they took the median repayments on a $1 million new home loan from $4,141 a month to $5,989.*

2023’s growth shows the incredible demand for Sydney property, as well as the ability of the market to withstand what many anticipated was going to be a severe shock.

2. Low stock levels could be changing

That said, there are some relatively unique ingredients contributing to the current growth market. The most noticeable has been a lack of stock for sale.

For most of this year, there just hasn’t been enough property coming to market to satisfy buyer demand (we’ve written before that if you really want to chart Sydney property prices, stock levels could be key.) The good news is that this may be changing. SQM Research reported that September 2023 saw the second most stock come to market of any month since November 2020.

Some commentators have suggested that one of the reasons for this growth, however, could be that more people are beginning to feel the pinch of higher interest rates, especially as their fixed-rate home loans expire.

However, that’s not what we see in our area right now. Anecdotally, most of the listings we’ve been receiving seem to be the result of more overall activity with sellers looking to upgrade or downsize within our local area.

3. There are some very good properties for sale right now

Instead, many properties coming to market now are coming from people who held off during 2022 and early 2023 as they waited for economic uncertainty to pass. The current increase in market activity is a vote of confidence that interest rate rises may be behind us and that the economy will likely stay strong.

As a result of these new listings, buyers have better choice now than they have had for some time.

There are some genuinely special properties on the market this Spring, including a growing number of Eastern Suburbs family homes – something that has been very hard to come by for the past few years.

4. But demand remains high

The bad news for buyers is that just because more property is coming to market, this doesn’t mean prices are likely to fall.

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We’ve noticed that an increase in supply has so far been met with an increase in demand.

This is evident in the Sydney-wide auction clearance rate, which stayed above 70% for the weekend of 7 October despite 800 properties going under the hammer. Here in the Eastern Suburbs, the auction clearance rate was even higher still at 75.2%.

With demand high and more choice of stock on the market, these conditions probably best suit those looking to buy and sell simultaneously. That’s because they are likely to receive a good price for their home, but also likely to find somewhere that’s suitable for their next move.

5. There is still value out there…

We know that affordability is a real issue in the Sydney property market. And, while we mentioned that there may not be any bargains out there, there are actually some parts of the East where first-home buyers can often get onto the property ladder for less than they may realise.

That’s especially true for those buyers prepared to settle on a one-bedroom apartment with a view to building equity.

For instance, in Centennial Park, the median value of a one-bedroom apartment is $678,000, according to Domain. And yet, you’ll have all the convenience and buzz of Paddington and the wide open spaces of the park itself right on your doorstep. Another great value proposition is Darlinghurst, where the median one-bedroom apartment sells for $710,000.

Even in the housing market, eastern suburbs buyers can often still get better value than they might realise by being prepared to extend their search area into the neighbouring suburb. For instance, a buyer considering Woollahra – where the median house sells for $4.5 million – may be surprised to learn that next door in Edgecliff, the median house price is $2.375 million.

6. The right time to move is always when it suits you

Finally, it’s worth remembering that there is usually little point trying to ‘time’ the property market. While Sydney property prices rise and fall in the short-term, the longer-term pattern is almost always one of growth.

That means the right time to buy or sell is when it suits you and your lifestyle – not when you think market conditions are in your favour. If you want to minimise risk, you should always look to buy and sell as close together as you can.

Want more?

If you’re interested in buying or selling a home in Sydney’s Eastern suburbs this autumn, get in touch.

* This assumes a 30-year principal and interest home at the median variable new loan rate using data supplied by the RBA (2.86% in April 2022 vs 5.99% in August 2023).