May Edition.

There is a duality in the Sydney property market that emerged in May, with the current interest rate environment seemingly unable to constrain overall buyer demand or participation.

That’s the view of leading Sydney property group BresicWhitney, following a month marked by higher-than-expected activity and prices, and auction clearance rates. CoreLogic’s confirmation that Sydney house prices increased by 1.8 per cent in May, and 4.5 per cent over the last three months, demonstrated growth at levels not seen since the 2020/21 boom.

“Cautious optimism has converted to material confidence, underpinned by a data set which will only become more compelling as immediate results are reflected,” said BresicWhitney Chief Executive Officer, Thomas McGlynn. “While interest rate rises have and will continue to limit purchasing power for some, they are no longer a significant barrier for buyers.”.

 

Buyer demand intensified in May, with the aforementioned increases in house prices exerting a level of pressure on some groups. First-home buyers continued to participate eagerly in the market, driven by the intended transition in Government assistance at the close of the 2022/23 Financial Year.

While listings remain subdued in certain pockets of Sydney, more owners are now in tune with the opportunities in the current market. At the same time, the ‘mortgage cliff’ that was expected to occur as owners converted from fixed to variable interest rates has also not been as significant as anticipated, helping to underpin the overall sense of stability in the market.

BresicWhitney’s May results reflected these positive conditions, and evidence a property market that is on the rise. The group’s auction clearance rate was 86.1 per cent for the month, while groups through open homes climbed 16 per cent on the prior month. BresicWhitney met a total 4,781 buyers across the month. With a total of 113 properties listed for the month, this is more than 70 per cent higher than in the same period 12 months prior. While this is a significant year-on-year increase, BresicWhitney does not believe that the higher volumes of listings will be enough to quell the expected price growth across the calendar year.

 

“Try as we might, the surge in May activity demonstrates the difficulty in predicting exactly what’s next for Sydney property. What we do know is that the recovery of the market is quite well advanced, and that there has been a major shift in the narrative and sentiment we were dealing with six months ago,” Mr. McGlynn said.

He added that the recovery had now permeated various property types and price points. “Pricing for smaller apartments or those in need of an upgrade tend to be the first to show symptoms of a weakened market. The fact that we’re now seeing pricing rebound for these properties is indicative of the improvements across the board. It’s the first time in 12 to 18 months that we’ve seen this type of equilibrium.”

BresicWhitney recorded robust results in May for properties offered both on and off market. Performance in the auction environment remained consistent, with standout results including the sale of 4 Osgood Avenue in Marrickville for $4.2 million and 178 Smith Street, Summer Hill for $3.95 million. Notable Inner East transactions included the sale of a five-bedroom terrace in Paddington in just six days for approximately $9 million, and a two-bedroom Bellevue Hill apartment selling in four days for over $2 million. Statement family homes meanwhile held their unwavering value, reflected in the sale of 6 Queen Victoria Street Drummoyne for $4 million, and 46 Mary Street Hunters Hill for north of approximately $7 million.

The duality in the selling market is also being reflected in the rental market. BresicWhitney’s Head of Property Management, Chantelle Collin said, “Demand for rental properties remains undeniably strong, however, some of the heat has lifted from the market. Tenants and owners are really educated about the fact that the current conditions have been magnified by undersupply. For the most part, tenants also understand that rental price increases are in fact a reversion to pre-pandemic levels. Apartments continue to generate the strongest foot traffic and we expect this to continue particularly given the ongoing return of international students.”