March 2023

Real Estate Round Up #56

Sydney Housing Market: March 2023

This month, according to (1), house price declines in Sydney have eased in February, with Sydney posting a rise. The article states that Sydney house prices have increased by 0.2% over the past month, which is a positive sign for the Sydney housing market. However, the article also notes that there is still some uncertainty in the market due to the ongoing pandemic and the potential for further lockdowns.

Secondly, (2) reports that auction clearance rates have bounced back to a 12-month high, indicating the state of the property market. The article explains that auction clearance rates have been on the rise in Sydney, with clearance rates reaching 83% in some areas. This is a positive sign for the housing market, suggesting that buyers are still active and that there is demand for property in Sydney.

Domain (3) provides an interesting example of a Quakers Hill home that defies the slowdown to sell for more than a year ago. The article explains that despite the slowdown in the Sydney housing market, some homes are still selling for more than they were a year ago. The article suggests that this is due to buyers’ preferences shifting towards larger homes with outdoor space and home offices.

Similarly, (4) reports that a Concord house sold for $4.5 million, $1 million above the price guide. This sale is significant as it shows that there is still demand for high-end properties in Sydney, despite the ongoing pandemic and economic uncertainty. The article suggests that the current low-interest rates may be contributing to the demand for luxury properties.

Uneven Effects of the Sydney Housing Market: Winners and Losers

However, not everyone is benefiting from the current state of the Sydney housing market. The real Estate Conversation (5) reports that rental affordability has seen slight improvement, but there is no joy for mortgage holders. The article states that while rental affordability has slightly improved, the cost of mortgages has increased, making it harder for some people to enter the property market or meet their mortgage repayments.

TREC also (6) sheds light on the gender gap in home ownership, with investments still driving it. The article explains that men are more likely to own property than women and suggests that this is due to women being less likely to invest in property. The article argues that addressing this gender gap in home ownership is crucial for achieving greater equality and social justice.

Furthermore, TREC (7) warns of a looming building slump, which becomes clearer. The article highlights the potential for a decline in the construction industry, which could have significant consequences for the Sydney housing market. The article explains that this decline is due to a combination of factors, including the end of the government’s HomeBuilder scheme and the ongoing impact of the pandemic.

The SMH (8) questions whether the auction market is causing a false dawn for property prices. The article suggests that while auction clearance rates are high, it is not necessarily an indication that property prices will continue to rise. The article explains that the high clearance rates may be due to a lack of supply, rather than an increase in demand.

Interest Rates on the Rise: Impact on Sydney’s Housing Market

TREC (9) reports that the cash rate has hit its highest level since May 2012, which may have an impact on the property market. The article explains that higher interest rates may make it more difficult for people to enter the property market or meet their mortgage repayments.

Additionally, it is worth mentioning that the high demand for housing in Sydney is not just coming from local buyers but also from foreign investors. A report by Commercial Real Estate (11) states that Chinese investors have continued to be the largest group of foreign buyers in the Australian property market, with the latest figures showing that they spent $4.4 billion in the last year alone. However, with the ongoing travel restrictions due to the COVID-19 pandemic, it remains to be seen if foreign investment in the Australian property market will continue at the same pace.

In conclusion, while the Sydney housing market has seen a slight recovery in February, it is not yet out of the woods. The high auction clearance rates and the increase in property prices indicate that there is still a lot of demand for housing in Sydney, but there are also concerns about affordability and the potential for a building slump in the near future. The gender gap in home ownership and the rising cost of living also remain pressing issues that need to be addressed. It will be interesting to see how the Sydney housing market evolves in the coming months and whether it will reach a tipping point or continue on its current trajectory.