Property Market Report March 20924 Sydney Inner West

It has been a fast start to the year for the property markets in Sydney’s inner city and inner west, with a new rush of buyers entering the market and competition increasing.

Looking behind the numbers

Sydney’s property market continued to perform strongly over the summer, with prices rising 0.6% in the past three months, according to CoreLogic, including 0.5% in February alone.

This means Sydney’s median dwelling price has lifted 10.6% over the past year to stand at $1,128,155. That’s now just -1.9% short of the all-time high recorded in January 2023.

This price growth has been accompanied by strong competition at auction, with the citywide auction clearance rate sitting around - or over - 70% throughout February, according to Domain. In our area, it has been higher still, with Auction Insider listing the Inner West auction clearance rate as 75.0%.

These are phenomenal results when you consider that this price growth comes in the face of rising interest rates, growing cost of living pressures and higher unemployment.

On the ground, we’re seeing exceptional numbers at open homes, with an average of 92 attendees since the start of this year. The high level of interest from buyers meant we began launching sales campaigns in mid-January rather than waiting until after Australia Day, as we usually do.

Lack of stock persists

One of the factors driving the market right now is a lack of supply. As we move into one of Sydney’s traditional ‘selling seasons’, there aren’t as many homes for sale as you might expect at this time of year.

What we always find interesting is to compare the number of auctions scheduled in Sydney versus Melbourne. Despite our city being slightly larger, roughly 30% more homes go under the hammer each weekend in the southern capital.

The fact that there are more transactions and a far greater turnover of ownership is one of the key reasons Melbourne prices are not rising like ours and one of the reasons the city’s housing is also around 30% cheaper.

So long as our city continues to have fewer properties for sale for the same population, buyers will face tougher competition, and prices will remain strong.

Growing confidence also at play

However, lack of supply isn’t the only market driver. We’ve also noticed growing confidence among would-be buyers, many of whom are more prepared to transact than a year ago.

This is mainly due to the pervasive belief that interest rate rises have ended and the RBA’s next move on rates will be downwards. As a result, we’ve noticed that many buyers have also been prepared to borrow and offer more than they were when rates were still increasing.

Combined with this, wages have been growing more rapidly than they have been for some time, and economic conditions in most sectors remain generally favourable. These factors are combining with strong population growth and a tight rental market (the median Sydney rent rose 12.7% over the past year, according to SQM Research) to exert pressure from the demand side, too.

Balance tilting towards first-home buyers?

One interesting thing we’ve noticed is that despite our area being a solid rental market, most buyers in today’s market are owner/occupiers rather than investors. In fact, there has been a trend towards investors selling to owner/occupiers - many of whom are becoming property owners for the first time.

This is great news when you consider that affordability has long been a serious issue in our city. As we recently flagged, more generous stamp duty concession thresholds and the federal government’s First Home Buyer Guarantee scheme are making it easier for some buyers to get onto the property ladder for the first time.

The only downside to this trend, if there is one, is that it further reduces the supply of rental properties in our area, which could put even greater pressure on rents.

Keys sales in early 2024

With the market as strong as it has been in some time, we’ve started 2024 with a series of significant sales. Here are some of the highlights.

4/92 Buckland St Alexandria. This 241 square metre designer townhouse sold off market for $2.4 million. It features three bedrooms, two bathrooms and two parking spaces. The last sale in the row of townhouses was for $2.3 million in July 2023.
1707/157 Redfern St, Redfern. This two-bedroom sub-penthouse with panoramic views sold at auction for $1,275,000. We issued 19 contracts for sale, while the auctionattracted 109 attendees and nine registered bidders.
68 Gerard St Alexandria. This beautiful three-bedroom character home sold at auction for $2.9 million.