Are you curious about what will happen to the Sydney property market in 2023 and beyond?
The Sydney property market has been one of the strongest and most consistent performers over the last four decades. Although the value of many properties in Sydney decreased during the property downturn of 2022, they had experienced a significant increase in housing values between October 2020 and January 2022, with a 27.7% rise. Currently, Sydney home values have dropped by 13.8% since reaching their peak.
However, there are signs that the Sydney housing market is turning around. Various sources, such as Corelogic’s daily home value index, Proptrack, and Dr. Andrew Wilson’s My Housing Market, indicate that Sydney house prices increased in May 2023. This suggests that the market may have passed the bottom of the downturn and is on a path to recovery.
It’s important to note that the market bottom is not a single day or week but rather a process, considering the diverse sub-markets within Sydney. Despite potential challenges, most experts predict that prices will continue to rebound.
Some suburbs in Sydney have limited property availability, with homeowners holding onto their houses for many years. Demand remains high in lifestyle and coastal suburbs as buyers wait for their dream roperties. After all, the Sydney property market continues to fetch impressive prices, particularly in some of the most sought-after areas.
According to data from CoreLogic, Sydney dwelling prices increased by 0.5% over the past week, 1.3% over the past month, but experienced an 8.5% decline over the past 12 months. However, PropTrack reports that Sydney dwelling prices have still risen by 22.8% since the beginning of the pandemic in March 2020.
The strength and depth of the Sydney property market are also evident in the strong auction clearance rates. The current strength and depth of the Sydney property market are also highlighted by strong auction clearance rates.
Looking at historical data, Sydney property values have seen significant growth over the past 30 years. House values have increased by 507%, while unit values have increased by 340.1%.
The housing downturn during the pandemic showed some resilience in Sydney, with only a 2.2% drop in prices. However, the downturn has affected the Australian housing market, with Sydney leading the way. The apartment market has performed better than houses, and the price gap between the two is narrowing.
Affordability constraints, increased interest rates, and reduced borrowing capacity have led to a preference for units among buyers. This presents an opportunity for long-term homebuyers and property investors.
Although some discretionary buyers and sellers have stepped back from the market, life goes on in Sydney. People will continue to marry, divorce, have babies, and need to move homes. Once interest rates stabilize and inflation is under control, these buyers and sellers are likely to return.
With the opening of international borders, Sydney will receive a significant influx of new residents, including skilled immigrants and overseas students. This will put additional pressure on the Sydney property market, especially the rental market.
It’s not just houses that are in demand. Well-located, family-friendly apartments in Sydney’s inner suburbs are likely to perform well due to increasing demand from owner-occupiers and investors. However, cookie-cutter high-rise tower apartments are likely to struggle.
In terms of locations with high demand, real estate in Sydney’s larger regional areas and lifestyle locations like Byron Bay, the Central Coast, the Hunter Valley, Wollongong, and the NSW south coast are expected to continue performing strongly. Beachside suburbs are particularly likely to outperform the overall market
More investors are entering the Sydney market, recognizing that bargains are scarce. However, they also believe that the properties they purchase today will appear as bargains in 12 months’ time.
Overall, the Sydney property market is showing signs of recovery and resilience, with various market segments experiencing different trends.