Sydney Unit Prices Rising
Here’s some good news for property owners and investors: Unit prices across Sydney are bucking the nationwide downward trend.
According to the Domain House Price Report for the September quarter, Sydney unit prices rose 2.6% in the third quarter of 2019. Gains have been felt in the eastern suburbs and city, among other areas, with Sydney’s overall median unit price now sitting at $694,840.
Prices in the eastern suburbs rose 2.7% during this quarter, with some areas faring particularly well. Bellevue Hill recorded a 7.90% year-on-year change with a median unit price of $1.2 million, while Potts Point saw 3.0% annual growth with a current median unit price of $845,000.
The fastest property market rebound yet
The Domain report also shows that the Sydney property market is seeing one of its fastest rebounds in decades – four times greater than the next strongest quarterly rebound of 1.2% following the 1994 market low. This has defied all market forecasts, leading a Domain senior research analyst to suggest that next quarter may even see a return to annual price gains.
Keys to recovery
A variety of factors have contributed to rapid upswing in prices. Among them, relaxation of lending standards, generous interest rate cuts, improved affordability, and a boost in buyer confidence following the results of the federal election. These factors combined mean we’re seeing more first home buyers and investors in the market.
Another major factor for unit prices is that the increased supply that was putting downward pressure on prices may be nearing its end. Developers are facing funding challenges, particularly for high-density apartment blocks. We’re also seeing consumer concern in the wake of construction scandals and concerns about combustible cladding. These factors, alongside the weaker market in general, have dampened some of the enthusiasm for new builds. While there is still residual stock around from the boom times now, it’s likely that Sydney will shift back to a cycle of undersupply within the next couple of years.
This impact will be further felt as the city’s population continues to grow. For example, the City of Sydney’s population is forecast to grow to 354,255 by 2041. And looking at Waverley Council area, the population was around 64,000 in 2006, and had grown to an estimated 74,000 by 2018.
Choose high-demand areas for long-term growth
While it always pays to be aware of what’s happening in the broader economy, because the property market always moves in cycles, your best bet is always to focus on areas that have good fundamentals. These include accessibility to the inner-city, strong public transport links, great local amenities, and high demand.
Sydney has distinctly different micro markets across the city. Blue-chip areas in the Eastern Suburbs are always popular with both owners and investors because of the excellent lifestyles they offer, from inner-city and harbourside living to being right by Sydney’s best beaches.
9/68 Plowman Street, North Bondi
This one-bedroom art deco apartment is for sale for the first time in 40 years and therefore presents a great opportunity to add value.
If you’re looking to buy in 2020, here’s a checklist of things to do before the end of the year. Be sure to register for our off-market listings to make sure you don’t miss out on any opportunities.
If you’re looking to buy or sell in Sydney’s eastern suburbs contact my team today.