July Edition.

The month of July welcomed unseasonably strong conditions for sellers of Sydney property, and while price growth has likely peaked, activity levels have not.

That’s the view of leading Sydney property group BresicWhitney, which transacted on 88 homes across the month of July and welcomed over 5,000 buyers through its open homes. While monthly insights highlight a school holiday-led decrease on the 114 properties sold by BresicWhitney in June 2023, a 12-monthly analysis confirms a volume almost double that of July 2022 (55). This illustrates the differential in present conditions to those of a year ago; conditions that have been incrementally improving since February 2023.

A significant portion of property transacted by BresicWhitney in July did so off market (30%) and prior to auction (25%), reflecting the depth of active buyers. Meanwhile, the group’s auction clearance rate remained above 80% on a Calendar Year basis, further reflecting the readiness and intention to purchase in this arena.

 

 

Looking forward, not back:
However, an even more compelling story about the Sydney market is revealed when an analysis of total listing volumes is undertaken, according to BresicWhitney; that being a metric pertaining to properties intended for sale but not on the market at the present time. 

Chief Executive Thomas McGlynn shared that while historical data will remain a mainstay in assessing market health, it’s not the singular measure, nor should be treated as such. “To have a holistic understanding and appreciation for what data such as price growth is telling us, we need to understand the reality of what’s happening that very day and how it informs tomorrow.

“Having insight into the pipeline of properties set to flow into the market gives us a valuable and accurate indication of seller intentions, the level of choice for buyers, the types of homes coming to market and more. In a city like Sydney that continues to prove its willingness to react to macroeconomic influences, this is a more meaningful indicator than some realise.”

It’s one that provides insights into trends occurring in the market too, he added. “The depth and breadth of the pipeline that’s being built at present for late August and September is not entirely unusual. However, when you combine this with the volumes already recorded for June and July, it’s clear that the impact of the traditional Winter lull is less relevant now as it was prior to the pandemic.” Mr. McGlynn also acknowledged the Reserve Bank of Australia’s (RBA) second consecutive holding of interest rates on 1 August as another boost of confidence and stability to sellers and buyers.

 

Price growth has all but peaked:
While BresicWhitney perceives price growth to have peaked – with a 5.3% increase across Q2 and a further 0.9% monthly increase in July, the slowest since February according to CoreLogic – activity levels are expected to continue their upwards trajectory. “August will be where we see the fork in the road, if you will, between price growth and the volume of properties on the market,” Mr. McGlynn said. “We expect price growth to regulate at or below 0.5% on a monthly basis over the remainder of the Calendar Year, which is constrained to some degree by this increase in homes for sale. Yet the two have a symbiotic relationship, and with more opportunities and choice for buyers, and a more stable economic outlook, it will present attractive conditions for both parties,” he said.

Field notes:
July cemented the ongoing equilibrium across Sydney’s key property markets, according to the group, with buyers more than ever seeking out lifestyle and value, in favour of a postcode. Suitably reflecting this – and the Inner West’s position as Sydney’s next trophy home market – was the pre-auction sale of 41 Georgina Street, Newtown. Setting a suburb record of $6.81 million – almost $1 million higher than the April 2022 record – the buyers were Eastern Suburb locals, heading West for the historic, six-bedroom, park-front terrace.

Meanwhile, homes that came to market across July were varied, with buyers exploring a new, three-level build in Camperdown, a landmark period-style home in Woolwich, a converted European-style residence in Glebe, a renovated terrace in Queens Park, and a suite of modern apartments spanning from Kirribilli to Bondi, among others.

Sydney’s rental environment: 
The ecosystem for Sydney renters in July was comparatively stable compared to the first and second quarters of the year. According to Chantelle Collin, BresicWhitney’s Head of Property Management, this has been a welcome reprieve for tenants but does not equate to the continued easing of pressure in coming months. 

“What we can ascertain from the underlying demand evident through July is that Spring and Summer will once again reveal the velocity of rental pressure and pronounced lack of supply. This is likely to encompass key precincts like the Eastern Suburbs right through to the Inner City and the Lower North Shore. Undersupply of course remains the leading contributor to the wider pressures in Sydney’s rental market and is an ongoing issue that we must address on a State Government and industry level.”

Ms. Collin concluded by reiterating the importance of long-term private investment in future supply, and that work should continue to be devoted to bringing property owners and tenants together to find mutually beneficial solutions.