June 6, 2024

Sydney’s property values have peaked

Despite rising interest rates and inflation, Sydney houses are more expensive than ever, garnering plenty of column inches as the press highlights the plight of buyers and renters. CoreLogic reported that Sydney’s overall dwelling values increased by 0.6 per cent in May, with the median house price climbing $20,000 to a record $1.44 million while unit values lifted 0.7 per cent to a record $848,961. This means that house values have now climbed 8.2 per cent over the past 12 months – more than double the inflation rate – with unit values increasing 5.4 per cent. However, even these figures have failed to quell buyers’ appetite for property.

CoreLogic research director Tim Lawless said extremely low levels of supply were putting the squeeze on prices. “It’s the disconnect between supply and demand that is trumping the downside pressures from interest rates, high inflation and low sentiment,” he said.
“Despite worsening affordability pressures, from both a purchasing and a rental perspective, Australian residents still need to keep a roof over their heads.”

Encouragingly however, Sydney’s June auction market began with an increased listing volume, with 820 auctions taking place on 1 June, the highest since the weekend of 6 April. This will no doubt come as welcome news to buyers who have experienced slim pickings when it comes to listings, although this coming June long weekend may see fewer auctions scheduled, as is often the case with holidays. For the past 10 weeks, auction clearance rates have been hovering around 66 per cent, which indicates that there’s a strong buyer pool out there ready and willing to act when a suitable property comes along, despite Sydney being less affordable than it’s ever been.