Why Now Is A Good Time To Buy Property In Sydney’s Inner City

March 8th, 2019 - by Brad Gillespie

A lot of talk about Sydney’s falling housing prices focuses on the downsides, but plenty of inner-city buyers know that it’s an excellent time to enter the market, with wonderful opportunities up for grabs.

As I mentioned in this recent Domain article, keen buyers are now able to purchase homes in inner-ring suburbs that were previously out of reach or to upgrade in the suburbs they already call home. Let’s look at why now is a great time to buy in Sydney.

Why now is a good time to buy in Sydney’s inner city

According to the January property report from REA Group, the median price in Sydney city and surrounds has dropped 7% since last year, but the upshot is that buyers are now getting better value for money. These reduced prices mean it’s now easier to afford something closer to the city or to move to a property in the same suburb with an extra bedroom or better amenities.

And no matter the market conditions, CBD proximity is one of the factors that will always appeal to a huge percentage of buyers, meaning demand in inner-ring suburbs will always be high. When the market boomed over the previous six years, that demand pushed prices further and further, causing a lot of buyers to be locked out of their dream suburbs. But the current price drops are easing that affordability pressure – properties that were out of reach just a few years ago are suddenly back in the budget for a lot of buyers.

With a flatter market, buyers can now be more selective and take their time finding a great home. Then once the sale is settled, there’s still more to look forward to – inner-city areas are also among the first to recover after a market dip, so buyers are more likely to experience growth in the short- to medium-term too.

Upsizers and upgrading in a flatter market

If there’s one group that benefits the most from the current market conditions, it’s upsizers. Price drops are particularly advantageous for homeowners eyeing off a bigger property, especially for those who have been hesitant about leaving behind their inner-city locale. In this market, it’s not uncommon to see a three-bedroom property sell for the same price that a two-bedroom would have just a few years ago. This is a relief for the young families of Alexandria and surrounds, who can benefit from more space without sacrificing lifestyle.

For those who want to move from an apartment to a house or townhouse, it’s much easier now than it’s been in a long time. It’s likely that the gap has reduced between your current home and your next home – when the price drops on your existing property, it often drops even more on the next level up, so you can benefit from quite a significant relative discount. According to data from Domain from the end of 2018, it’s now $186,500 cheaper to make that leap to a house in Sydney’s inner city now than it was a year earlier.

The opportunity for first home buyers

Lower prices also make it much easier for first-time buyers to enter the market, which is great news for those who don’t want to stray too far from the inner-city rental locations they’ve been calling home. Instead of being priced out, they’re now able to secure their first property in the inner city’s many excellent apartment buildings.

But it’s more than just prices easing the first-time pressure; investors are increasingly leaving the market thanks to tightened lending restrictions and less short-term growth, so there’s more opportunity for new buyers to find a property.

Why it’s also a good time to sell

Even though buyers now have more power than they’ve had in the market in recent years, it’s by no means bad news for sellers. One of the key things to keep in mind is that lower prices don’t mean bad prices – what we’re seeing now is just a drop from a high peak, but vendors are still getting excellent results from their sales and benefitting from all that positive growth from the past five or six years.

Westpac data from the end of 2018 also shows that Australian buyers see now as the best time to buy since March 2015, especially in NSW. This means more interested buyers keeping an eye on the market and healthy demand to start the new year.

Keen to benefit from the softer market and buy or sell in the inner city?

Get in touch with my team today.