Sydney home price rises have accelerated ahead of spring – ending a winter lull that had descended over much of the city market.
PropTrack’s latest Home Price Index released Sunday showed city prices inched up an average of 0.32 per cent over August – a modest rise that was nonetheless about three times the rate of growth over July.
Sydney’s median dwelling price, based on sales of houses, units and townhouses, is now $1.096m – just shy of 6 per cent higher than it was heading into the spring of 2023.
The growth defied a recent uptick in listings, which had been expected to moderate prices by thinning competition for properties and easing pressure on buyers to offer more.
Experts said the impact of the listings jump turned out being more muted than expected because it coincided with a similar rise in buyer demand.
Competition for homes, especially at auction, has been high over most of the year.
“New listings are being absorbed as they come onto the market,” said PropTrack economist Eleanor Creagh.
“We will need to see a much bigger change in listings and fewer buyers coming into the market for things to really slow down.”
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Ms Creagh said some of the forces that pushed up prices had been deeply rooted in the market for some time.
This included record population growth, sluggish building activity and soaring rents encouraging more tenants with means to become homebuyers.
“In a sense the growth can be (self-fulfilling). Knowing prices are going up encourages first-home buyers to do whatever they can to get into the market despite the affordability challenges,” she said.
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The outlook for buyers could improve in the coming months, but much remained uncertain, according to Ms Creagh.
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“If we continue to see strength in listings, and it’s not met by another increase in demand, we will find sellers have to adjust their expectations lower and the balance of power will shift to buyers.
“It’s a possibility for Sydney and given the influx of choice we are expecting, buyers may be in a position where they’re able to be more picky, but to what extent this happens, we’ll have to wait and see.”
PropTrack indicated the pace of price growth varied considerably across Sydney regions.
Cheaper markets such as the inner southwest, which includes much of the St George and Canterbury-Bankstown regions, had the biggest annual growth at about 10 per cent.
Economist Eleanor Creagh.
The Parramatta region followed with an 8.78 per cent average rise in home prices, while there was a similar rise in the southwest, which includes much of the Fairfield and Liverpool areas.
Blacktown was another higher growth region with an annual rise of 7.35 per cent.
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The better affordability on offer in these city regions was reported to have attracted higher demand from buyers who had been pushed out of pricier areas by interest rate hikes.
It was the opposite in more expensive markets such as the north shore, CBD and surrounds, and the Hills district, where prices flatlined for the year.
My Housing Market economist Andrew Wilson said he expected these regional city trends to reverse in the coming months.
Listings have been rising over recent months but so too has buyer demand. Picture: Gaye Gerard
“The upper end of the market has been underperforming for quite a while and this could encourage more buyers to get back into these areas,” he said.
“For the more affordable areas, the appeal can sometimes drop as prices rise and buyers encounter more problems getting the financing needed to pay those higher prices.”
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