Recent interest cuts have ignited another surge in Sydney property values and house prices could average an unprecedented $1.5 million by as early as spring if their current trajectory continues.
PropTrack’s latest Home Price Index released Monday showed the median price of dwellings, based on sales of units, townhouses and houses, rose 0.36 per cent over May.
It was the fourth successive month of growth in prices since the Reserve Bank announced the first of two interest rate cuts in February, with prices up about 1.5 per cent since the cut.
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A recent, crowded auction in Alexandria. Agents have reported buyer demand has risen. Picture: Jeremy Piper
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Recent growth has also marked a rapid turnaround from late last year when prices were falling and buyer demand slumped as cost of living pressures squeezed aspiring purchasers out of the market.
The median price of a Sydney house is now $1,471,000, while the unit median has risen to $820,000.
REA Group senior economist Eleanor Creagh said the market was picking up momentum and it was likely house buyers would soon be paying an average of $1.5 million across the Greater Sydney area.
This would put Sydney prices a good $500,000 ahead of the country’s next priciest city Brisbane, where the median house price is currently $998,000.
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Source: PropTrack.
“Interest rate cuts have been the clear catalyst for growth and we can expect more price rises to come,” Ms Creagh said.
“(Cuts) have boosted buyer demand and improved confidence. There is also an expectation among buyers that lower rates will lift prices and that has brought forward a lot of people’s buying decisions.
“Another factor is that there’s less uncertainty in the market. The federal election has passed and some of the global economic concerns have eased.”
Mortgage Choice broker James Algar said the impact of rate cuts on buyer confidence could be seen in rising requests for loan pre-approval. “We’re starting to get a lot busier,” he said.
Auctioneer Edward Riley, fresh off an auction sale where the price went $450,000 over reserve, said it was clear that FOMO, or the fear of missing out, was “creeping” back into the market.
Auctioneer Edward Riley said FOMO was returning to the market. Picture: Tim Hunter.
PropTrack indicated that the strongest markets since the interest rate cut in February have been the southwest and inner west.
Prices in the former have risen by an average of about $22,000, or 2 per cent, since the cut, while in the inner west the increase was about $30,000, or 2.33 per cent.
Mr Creagh said some of the growth in the southwest region was likely the result of increased competition for properties in the areas around Bradfield, which will form part of a precinct around the Western Sydney airport slated to open next year.
TOP GROWTH REGIONS OVER LAST 3 MONTHS (by median dwelling price rise)
Inner West 2.33%
South West 2.03%
Sutherland 1.86%
Parramatta 1.84%
Northern Beaches 1.51%
Outer West and Blue Mountains 1.51%
Central Coast 1.49%
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