Spring 2023 Property Market Report Sydney Inner City and Inner West

Sydney’s property market has been heating up over 2023.

Since January this year, the city’s median dwelling price has risen 8.8% to $1,098,821, according to CoreLogic. As a result, our city’s property values have regained much of the ground they lost in 2022.

But what’s happening on a micro level here in Sydney’s inner city and inner west? We explore the state of our local property market in Spring 2023.

The state of play in Sydney’s inner city and inner west property markets

The inner city and inner west have very much shared in these recent gains. In fact, parts of our local area have been among Sydney’s best-performing suburbs, especially over the past few months.

What’s interesting, however, is that the lift in our local suburbs has often been more recent and more steep than the citywide average.

For instance, house prices in Marrickville and Newtown have both risen by around 7.0% since bottoming out around April this year, according to realestate.com.au.
In Erskineville, house prices have performed even better, rising 9.7% since their May 2023 trough. Meanwhile, in Waterloo, the median house price has jumped an incredible 25.2% since June 2023.

The apartment market has often also been experiencing recent gains, although these aren’t quite as steep as the housing market. For instance, Alexandria apartment prices have lifted 4.8% since May 2023.

As you might expect, these gains are coming off the back of strong demand, with Sydney’s inner west recording a 74.5% auction clearance rate for the weekend of 16 September 2023.

What’s causing property prices to rise right now in Sydney’s inner city and inner west?

We believe the strong clearance rates and recent jump in local property prices are the result of several factors.

Interest rates stabilising. While the RBA was raising interest rates, a lot of people held off buying (or selling). We’ve noticed more people come onto the market since the RBA stopped raising rates in June this year.
High rents. Rents in Sydney’s inner west rose 23.7% over the past 12 months, according to SQM Research. This is encouraging investors to re-enter the market and take advantage of high yields. It’s also encouraging more people to enter the property market for the first time. In fact, ABS data shows loans to first-time buyers have been rising in 2023, even while interest rates were going up.
Growing population. During the pandemic, our city’s population stabilised. Now that borders have reopened and life has returned to normal, we’re seeing record levels of immigration. As many as 700,000 new Australian residents are expected to arrive over 2023 and 2024. We’re seeing more people look to move to our area, putting added pressure on the housing market.
Lack of development. As we reported recently, there has been a lack of significant projects taking place in our area recently compared to the past decade.
Lack of supply generally. It isn’t just new properties that are lacking. There has been a lack of good established property coming to market, too. This has been causing an imbalance in the relationship between supply and demand. However, there are positive signs this is changing, with more property steadily coming to market over the past couple of months, according to CoreLogic data.
Changing demographics. We’ve noticed two groups of buyers in our area who are competing for good properties and driving demand. The first is downsizers, who have often recently sold a family home in the suburbs and want to be close to the action. The second is upsizers, who want to stay local. These buyers are often coming from apartments and want to move into a house or three-bedroom apartment. This often puts them in direct competition with downsizers and is causing the top of our local market to outperform.

Shifting market dynamics

Despite this, we believe there is good news for both buyers and sellers in today’s property market.

Sellers can take heart that good local property is in demand across the board. So long as you’re prepared to be patient and realistic, your property will sell in today’s market - something that wasn’t always guaranteed at the start of the year.

For buyers, the good news is that people are transacting again. While there is more competition in the market, there is also more stock available. This means you’re much more likely to find your perfect next property.

Properties for sale

If you’re interested in buying today, here are some of the great properties we have available right now:

16 Kensington Street, Waterloo, an excellent and private 228 sqm three-bedroom family townhouse, this property goes to auction on 7 October with a price guide of $1.5 million.

43 Buckland Street, Alexandria, in a coveted tree-lined street, this house offers three bedrooms, DA-approved plans and a prime parkfront position.

198-200 Australia Street, Newtown, is a truly unique warehouse conversion offering five bedrooms, parking for four cars, a pool, and multiple living areas across a unique heritage building. It goes to auction on 7 October.

74 Samuel Street, Tempe, is a four-bedroom home with a granny flat going to auction on 7 October with a price guide of $1.3 million.

4/187 Cleveland Street, Redfern This ground-floor, two-bedroom apartment offers parkside living with leafy outlooks in a vibrant city fringe location, with great appeal to first home buyers and investors.