March 2022

This is the 44th in a series of articles summarising monthly news and happenings in Sydney real estate, and more broadly.

The cooling summer

The market seems to be cooling off. Alice Stolz, Domain’s national marketing editor, writes in a weekly column that:

“The temperature is dropping at auctions and the mood is shifting in the country’s biggest property markets. Everybody from Federal Treasurer Josh Frydenberg to the local butcher has an opinion on not if, but when interest rates will rise. The ‘tighten your belts’ narrative has started.”

It’s not just Ms Stolz saying the market is cooling. According to the ABC, Sydney house prices had a fall in Feb of 0.1% which is the first fall in 17 months. Core Logic’s Head of Australian Research Eliza Owen is quoted as saying this was the equivalent of a fall of about $1000 for a median priced home. Considering Sydney house prices this is barely a drop in the ocean, so probably don’t start planning an urgent purchase yet.

Real discusses which areas are slowing more quickly than others. The article suggests that any area with runaway growth last year might be feeling more of the slowdown this year, having perhaps reached a perceptual ceiling of affordability / sanity. This includes the northern beaches, eastern suburbs and inner west. In fact, according to this article, over a quarter of Sydney suburbs have a median house price in excess of $2 million, so a ‘cooldown’ or a ‘fall’ in prices is a relative topic.

Investment advice

If and when it comes to it, this story has a great list of dos and don’ts for investing in property. Apart from increasing objectivity and decreasing emotions, the main thrust seems to be to not just look at the property itself but also have a look at what is going on locally (and/or regionally).

There is also a similarly themed article of common mistakes first home buyers make, and the corresponding actual correct response to a situation. Kind of sobering, passion reducing and financial-focussing, however sound advice none the less. The key seems to be to adopt the same sort of methodical approach often found in project management: rather than flying in with guns blazing and taking a big risk, pragmatism rules the day.

However, focussing in on what makes an area good, this story talks about how living in areas with good quality green and more natural areas are better for health and wellbeing. With people considering their residential priorities as a result of the pandemic lockdowns, the attraction of really nice areas has increased.

So when is the right time to buy? The eternal question is looked at in this article by John McGrath writing for the Real Estate Conversation. At the end of the day, he writes, “The only factors that should be driving your decision to buy are personal needs and affordability.”


As noted in Domain ‘Saving for a first home has never been harder’ with the average time it takes a couple to save a 20% deposit is now well exceeding 5 years. This is a timely observation since The Real Estate conversation Reports on the handing down of an inquiry into housing affordability, by the Standing Committee on Tax and Revenue.

The article says the report dispels myths, and includes 16 recommendations for state and federal Governments such as the abolition of stamp duty, and a more coordinated approach throughout levels of Government. Disconcertingly the story ends by implying that it was disappointing that the report did not receive bi-partisan support, though this was not explained.

With a federal election imminent, thoughts are also turning to the policies of the major two parties. The Real Estate Conversation, as opposed to the last federal election, has welcomed the Labor announcement that negative gearing is safe, and that there is bi-partisan support to broaden the First Home Loan Deposit Scheme (FHLDS) to allocate 10,000 places for regional properties, however the Sydney cap in particular is pretty limiting considering the huge property values – perhaps that’s the point. The ABC claims the Sydney cap will limit single-parent homebuyers to 1 suburb only.