Sydney’s Inner City real estate market got off to a slow start in 2019.
But as the end of the year approaches it has become a good news story, with buyers returning to the market in big numbers and a strong property price recovery that isn’t yet out of control.
The quickest recovery in decades
Domain’s September House Price Report shows that the median dwelling price across Sydney rose 4.8% to $1,079,491 over the September quarter. This means in just three months the market has gained back almost a third of the value lost during the two-year downturn.
The Inner-West performed even better, with Domain research revealing the median house price rose 6.9% to $1,550,000 and 4% in the year to September, compared to a city-wide 12-month decline of -1.6%. This made the Inner West Sydney’s best performing market for houses over the past 12 months.
Units in the Inner West experienced a 3.3% quarter-on-quarter growth, and a slight year-on-year decline of -1.3% so that the median price now sits at $762,000.
Still, Domain analysts have noted that this has been the quickest city-wide turnaround for the Sydney property market in decades.
In doing so, they’ve observed that the growth the Sydney market experienced over the September quarter was four times greater than the next strongest quarterly rebound of 1.2 per cent, which followed the 1994 market low. They also argue that the strength of the recovery has taken many by surprise.
What we’re seeing in Sydney’s Inner City
We believe this data reflects exactly what we’re seeing on the ground at open for inspections and auctions across the Inner City and Inner West.
We have observed a definite shift in the market since the year began. For instance, auction clearance rates are now 80-90% in the Inner West compared to 50%-60% a year ago. While the amount of stock on the market may have decreased over that time, we feel that, on the whole, both buyer and seller sentiment has improved markedly.
Sellers are generally more confident they’ll be able to achieve a competitive price for the property. At the same time, buyers are more optimistic about the fundamentals of the market and therefore more prepared to offer top dollar to secure a home they like.
What’s behind the change?
Speaking to both buyers and sellers, this positive change is due in part to the fact that it’s easier to borrow right now than it has been in recent years. Thanks to changes from APRA, banks have loosened their lending criteria a little and, after consecutive cuts in recent months, interest rates are also sitting at unprecedented lows.
Also, in the property market, confidence breeds more confidence. So, as buyers are now seeing more competitors attending open homes, as well as more people registering and bidding at auctions, they’re encouraged to put their best foot forward.
What buyers and sellers need to know about Sydney’s Inner City property market right now
It’s still a great time to buy and sell property in Sydney’s Inner City. While the Spring market is showing strong signs of recovery, we’re not yet in the same kind of sustained and rapid growth phase we were accustomed to seeing a few years ago. For instance, in the year to March 2017, Sydney house prices rose 13.10% and that came on the back of almost two years of similar growth. Instead, these current price gains follow falling prices and reduced activity.
Vendors looking to upsize can still make a considered decision and capitalise on the move to a larger property without having to stretch themselves as far as they would in a ‘white hot’ property market.
We also think there are real opportunities in the market right now for first home buyers.
In particular, our view is that apartments in Erskineville and Alexandria present a great opportunity for people looking to get onto the property ladder for the first time. There are still great opportunities under $800,000, which allow first home buyers to take advantage of stamp duty concessions.
We expect to see this upward trend and positivity in the market continue towards the final auctions of the year in December.
Auction clearance rates and volume for the week of 24 October 2019
Sydney’s overall clearance rate: 79.2%
City and Inner South
Clearance rate: 78.9%
Clearance rate: 86.9%
Median sales price houses $1,405,000
Median sales price units $708,000
Median sales price houses $1,240,000
Median sales price units $855,000
If you looking to buy or sell in Alexandria or Erskineville contact our team today.