MICHAEL YARDNEY / Thursday, December 19, 2019
The Sydney property market is on the move, having recorded its quickest turnaround in decades.
Since bottoming out after the election in May, Sydney housing values have recovered 6.2% in the last three months, but the market remains 8% below the July 2017 peak.
Sydney house prices increased 3.1% over the last month (7% over the last quarter) while apartment values increased by 1.8% over the last month ( 4.2% over the last quarter.)
Despite the rise, Sydney dwelling values are still tracking around the same level as they were three years ago.
The recovery trend is most concentrated across the premium end of the housing market where values were previously falling more rapidly.
Sydney house prices in the top quartile rose by 5.9% over the past three months while the houses prices in the lower quartile are up a smaller 3.2%.
The following metrics confirm the Sydney housing market is steadily improving:
- The average selling time of a home is 31 days (it was 44 days a year ago);
- Vendors are discounting their properties an average of 3.6% to affect a sale (6.3% a year ago); and
- 6.8% fewer properties sold in the last 12 months compared to the previous year.
Currently investors are abandoning the off-the-plan apartment sector for many reasons, including concerns about construction standards, and many of those who purchased off-the-plan a few years ago are now having trouble settling with valuations coming in on completion at well below contract price at a time when banks are more reluctant to lend on these properties.
In the background, strong economic growth and jobs creation is leading to population growth and ongoing demand for property in Sydney.
At the same time, international interest from tourists and migrants continues.
The beginning of this new cycle is a great time to look at buying an investment grade property in Sydney which is currently offering investors an opportunity to buy established apartments in the eastern suburbs, lower North Shore and inner west at a discount to what they would have paid a number of years ago.