Parts of Sydney’s housing market have defied the laws of gravity with continued home price rises during recent weeks of global economic turmoil.
New PropTrack valuations data has revealed unit and house prices rose in a range of Sydney suburbs over the past quarter, a period marked by two interest rate hikes and fears of a coming recession.
Citywide dwelling value growth over the three months largely flatlined at about 0.8 per cent but there were 267 suburbs where house values continued to grow, accounting for about 40 per cent of Sydney areas. Unit values rose in another 227 suburbs.
Some of the biggest price rises were recorded in more affordable unit markets spread across the city, but there were also perennially popular premium pockets where quarterly price growth was nearly double figures.
Prianca and Brent Maxwell, with kids Felix and Lara, at their home in Bondi, where prices grew 8 per cent over three months. Picture: Richard Dobson
The biggest rise in Greater Sydney was recorded in Wyong, on The Central Coast, and Thornleigh on the north shore. Both areas recorded apartment value rises of 9 per cent over the three months.
Other top growth suburbs were Bondi and Manly, where house values rose a respective 8 and 9 per cent.
Unit price rises of 5-8 per cent were recorded in Castle Hill, Belfield, Rydalmere, South Granville, Georges Hall, Seven Hills, Stanhope Gardens, and many other areas.
The value increases have exposed just how entrenched housing shortages and chronic building industry challenges remain, proving a bulwark against forces that would normally stifle housing demand.
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8 Herbert St, Manly recently sold for $5.3m.
Experts also revealed the federal government’s First Home Guarantee Scheme, available for Sydney purchases under $1.5m, has further boosted demand at the bottom end of the market.
PropTrack senior economist Anne Flaherty said the state’s diverse locations for price growth reflected local supply and demand dynamics.
“People absolutely are feeling more cautious at the moment, we saw consumer sentiment for the Roy Morgan’s Consumer Sentiment Index was the lowest level on record last week in over 50 years,” she said.
17 Vale St, Clovelly sold for $3.02m.
“That translates to property decisions – people may take longer to make their decisions or may be more cautious with where and when they buy.”
She said Sydney and regional NSW’s best performers were areas where entry prices were lower.
“With the affordability challenges that have worsened this year, those suburbs are attracting a higher share of the total pool of buyers,” she said.
Ms Flaherty said regional NSW is likely to continue to see strong performance driven by affordability, lifestyle and demographics.
“Greater Sydney is by far the most expensive capital city – affordability does drive people out to the regions,” she said.
Ms Flaherty said an unexpected Sydney trend was a handful of more expensive suburbs outperforming.
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REA Group economist Anne Flaherty.
“Manly, Bondi and Clovelly jumped up at me when I looked at the list. Despite their very high price points, they’ve still seen strong quarterly growth,” she said.
“Those tend to be tightly held suburbs, even though the majority of buyers can’t afford to buy in them. When homes do come up for sale in those areas, they can attract a lot of interest.”
Ray White Double Bay principal Warren Ginsberg said Bondi values grew due to high demand and low supply.
“Semis or freestanding homes are like diamonds in the Bondi postcode, they’re hard to get,” he said.
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Ray White agent Warren Ginsberg. Picture: John Appleyard
Mr Ginsberg said those buying into blue-chip eastern Sydney suburbs often accumulated wealth from selling previous properties and could fund new purchases with small loans and significant amounts of equity.
“(They) can manage the repayments. I don’t think we’ll see as much of an impact in this market than other markets,” he said.
Mum of two Prianca Maxwell lived in Bondi when she first moved to Australia and in 2009 and purchased her family home in the suburb around two years ago.
The Maxwell’s purchased their home in Bondi about two years ago. Picture: Richard Dobson
Ms Maxwell said the price growth makes her appreciate getting into the market when she did.
“It’s so beautiful and such a limited resource,” she said. “I feel very lucky to be living here.”
According to Ms Maxwell, those who want to live in the suburb will likely pay the rising interest rates to remain there.
“I think every family is impacted to some degree,” she said. “Luckily, we still have a buffer of savings.
“The people able to afford to buy here tend to have enough (equity) that rising prices won’t affect them that much and will probably pay the (rate) increase because they know it’s a limited resource.”
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