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Treak Real Estate Property Update: June 2022

Welcome to the Treak Real Estate Property Update: our regular round-up of news from the Sydney and national property markets, as well as what’s happening right here at Treak!

What’s the deal with Sydney property prices?

Boom? Bust? Somewhere in between? It feels like every headline about Sydney property prices contradicts the last, so let’s dig into the numbers to work out exactly what’s going on.

First we need to recognise that last year was – here comes that word again – unprecedented, with a 20+% price rise in Sydney property values. It was always going to be hard to keep up that sort of pace, and unsurprisingly property prices fell 0.5% in the first three months of this year. This isn’t really a fall in the traditional sense, but more of a correction on the unimpeded growth of last year.

Homes are also taking a little longer to sell. According to Domain, this time last year auction clearance rates were at 71%, but they have fallen to 54% as of 6 June. Combine faster than expected interest rate rises, more expensive credit and an increase in housing supply, and according to ANZ, dwelling prices are expected to fall by around 3% in 2022, and a further 8% next year.

But there will be exceptions. A-grade homes, family-friendly apartments and other investment-grade properties will continue to perform strongly, particularly in Sydney’s inner and middle rings.

An undersupply of new apartments is looming, as investor demand for off-the-plan apartments collapses in Sydney. Reduced sales are currently making it difficult for developers to get projects off the ground, although this could change as international borders open up.

The Sydney rental boom

While Sydney property prices might be temporarily receding, there’s money to be made in the rental market. Rental demand is incredibly strong at the moment, with vacancy rates at just 1.4%. Compare this to the start of the pandemic, in April 2020, when Sydney vacancy rates peaked at 3.8%. With competition for rentals so high, it’s no surprise to hear that prices are going up.

The strongest rental demand is currently seen in houses, though the screws are beginning to turn on the apartment market too. The limited supply is a reflection of the fact that so many investors cashed in over the last year or two, and many who bought into the market were instead owner-occupiers, which reduced the total rentals available. On the flipside, a good portion of the uptake was from first home buyers who had previously rented, which meant that while there were fewer rentals, there were also fewer renting households.

It’s a harsh reality that what’s good for landlords tends not to be so good for tenants, who are forced to pay more for less in such a competitive market. The quality of the agent can make all the difference to the experience of a tenant, a point that we at Treak Real Estate are passionate about proving. Learn more about our tenant-first approach here.

Giving the gift of warmth this winter

As the temperature drops, life just gets tougher for Sydney’s less fortunate, which is why winter is such a key season for our Real Estate for Good initiative.

We have so far donated $14,238 to Sydney charities – a number that with your help we’ll continue to grow this winter. For every property we lease, we’ll donate $25 to the Donate a Plate Drive by Wayside Chapel, which will provide a freshly cooked meal and ongoing support to those doing it tough. And for every property purchase we facilitate, we’ll provide one cosy, fire-retardant sleeping bag to the homeless through our partner Backpack Beds.

Backpack Beds is an Aussie charity that aims to deliver warmth and dignity to those doing it tough on the streets. Last year they donated over 6000 backpack beds to homeless people in Sydney and beyond, and thanks to our wonderful clients, we’re proud to have helped this cause in our own little way.

At Treak we also have one eye on the future. We want to be a force for good – to play our part in creating a better world for the next generation. And so we’ve partnered with the Foundation for National Parks & Wildlife and their Plant a Tree for Me campaign.

By sharing this Facebook post and/or tagging a socially conscious Landlord in it, we’ll plant a tree in your name! FNPW do incredible work in cultivating native trees, rehabilitating bushland and restoring habitat for threatened wildlife, so this might be the most valuable five seconds you spend today!

And if you’re thinking about switching to a socially conscious real estate agency, one where you can find your perfect property, set yourself up financially and feel good while you do it, why not make the switch to Treak? We back up our talk with real action, and we’re proud to bring the warm and fuzzies to the property industry – one that at times can feel lacking in charity.

Your Sydney property experts

At Treak we understand the challenges of navigating the property market – it’s all we do! Whether you’re looking to secure your dream property, find that perfect rental, or capitalise on the current market and cash in your chips, we’re ready to help.

Give us a call on 0433 156 465 or contact us here to hear how!


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