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!
The Resilient Sydney Property Market
The Sydney property market is proving its resilience, with prices continuing to rise despite a series of challenges. Over the past eight months, we've seen 12 interest rate hikes, high inflation, and reduced borrowing capacity. Yet, property values in our combined capital cities have surged by 8.0% year-to-date. This positive trend contradicts the pessimistic forecasts from the Reserve Bank of Australia and several bank economists just a year ago.
An Optimistic Spring Outlook
As we embrace the Spring selling season, there's optimism in the air, with expectations that property prices will continue to increase, albeit at a more moderate pace for the rest of the year.
While some industry experts suggest that the surge in property prices may decelerate due to an increase in new listings, it's important to note that the available stock for sale remains low compared to historical standards. Even with more properties entering the market through auctions, the high clearance rates indicate strong demand.
According to Corelogic data as of October 23rd, 2023, Sydney's property prices saw a 0.2% weekly increase and a 0.8% monthly rise. Year-to-date, they've soared by a substantial 10.7%, marking an impressive 8.4% increase from their value 12 months ago.
In essence, this is a window of opportunity as we transition into a new phase of the property cycle. Generally, properties are still priced below their recent peaks, but this gap is quickly closing, and we are poised to reach new heights soon.
Tightening Rental Markets and Growing Demand
Now, let's shift our focus to the rental markets. They've been experiencing further tightening over the past few months, with record-low vacancy rates for both houses and apartments across the country. Asking rents are on the rise, with house rents registering double-digit annual growth in the capital cities. Units have seen even more rapid growth, particularly in Sydney, Melbourne, and Brisbane, with new asking rents increasing at rates exceeding 20%.
The latest National Accounts data reveals that Australia's population has grown by approximately 620,000 people in the past fiscal year, exceeding earlier projections. This substantial expansion in the 15-plus age group is creating pressure on our rental markets.
The number of overseas students and individuals on graduate visas in Australia increased by just over 300,000 in the same fiscal year. Particularly in inner-city rental markets, popular among international students, rents are rebounding after a slump during the pandemic when international borders were closed.
While the pace of rental growth is expected to moderate, current vacancy rates suggest that rents will continue to rise due to minimal new property supply in the medium term.
Opportunities in the Sydney Property Market
In summary, the Sydney property market's resilience and the ongoing growth in property prices are creating opportunities for both buyers and sellers. However, it's essential to remember that the right time to buy, sell, lease, or rent will always be a personal decision based on individual circumstances.
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 or find that perfect rental, we’re ready to help.
Give us a call on 0433 156 465 or contact us here to hear how!
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