Spring will bring its trademark uplift in Sydney property market activity, but the seasonal shift won’t be as pronounced as in years gone by, according to BresicWhitney.

That’s due to unseasonably strong activity recorded across Winter, with a year-on-year analysis by the leading Sydney property group revealing the extent of this annual improvement. Headlining the findings was a 48% increase in properties sold by BresicWhitney across the month, with 107 recorded in August 2023 compared to the 72 transactions in August 2022.

 

Supporting this differential was an uplift in the volume of properties listed by BresicWhitney for sale in the month; with the 151 marking a 57% increase on the 96 homes in the same period the year prior. This includes properties not yet visible to the market and is reflective of seller intent and willingness to transact in the immediate environment.

Auctions remained the preferred method in which Sydneysiders bought and sold property in August, with 73% of real estate sold by BresicWhitney transacting in this manner, underpinned by an average clearance rate of 78%. A smaller portion of properties changed hands off-market, with 21% selling directly via the group’s interconnected buyer database.

 

Key observations.
BresicWhitney CEO Thomas McGlynn said the data highlighted the shift to have occurred in the market over 2023. “The ‘wait and see’ mentality that many sellers adopted in mid-2022 with respect to interest rate rises has all but dissipated, with the cycle now nearing its peak. Buyers are gravitating to the increased choice in property that Winter and now Spring will continue to deliver, while the slowdown in price growth is encouraging both sides to act on decisions they may have been thinking of. While there is a shared understanding that the most significant price growth gains have already transpired, it’s likely we will record more growth between now and December, should the cash rate remain steady,” he said.

CoreLogic revealed that Sydney house prices grew by a further 1.1% in August, following 0.9% in July. This brings total house price growth to 8.8% since January 2023, with BresicWhitney’s outlook for additional modest growth supporting Westpac’s estimate of +10% for the year.

 

Mr. McGlynn said the fluctuations in price growth were an important reminder of the speed at which the Sydney market can pivot. “The main benefit of this is that certain constraints can lift relatively quickly. The other side is that there’s very little grace period for those, as an example, who may have been intending to wait until there was clarity on some of the longer-term economic indicators. We must remember that we are operating in the fastest-moving real estate market in the country and with that comes a need for sellers and buyers to remain agile in their property decisions.”

 

Visible buyer intent.
From Northbridge to North Sydney, Paddington to Pyrmont, Redfern to Russell Lea, BresicWhitney welcomed over 2,000 more buyers through its open homes in the August 2023, than it did in August 2022. This surmounted to over 7,800 buyers across the month, and an average of 15 attendees per open home. The group also recorded its highest level of online traffic since April, signalling a material uplift in buyer intent.

“We have the fortunate position of being able to see in real time what is happening across majority of the key Inner Sydney markets, being those within a 10-15 kilometers radius of the CBD,” Mr. McGlynn explained. 

“We continue to see a very healthy level of underlying buyer demand, one that has been strong throughout Winter and is now giving Spring activity an even stronger runway than in previous years. We also continue to witness how robust this demand is and its spread across all buyers, which is providing further confidence to sellers, be it of a family home, an apartment, a townhouse or otherwise,” he concluded.

Field notes.
Key sales that reflect this include a two-bedroom, ground-floor apartment in Glebe that sold for $2,006,000 at auction, with four active registered bidders. BresicWhitney believes this to be a suburb record for the type of property; with the successful purchaser an existing resident of the street looking to downsize.

Activity continued across the Inner North with a newly built home at 15 Providence Street Ryde selling for $2.5 million, and buyers from Concord purchasing a home at 9 Rocher Avenue, Hunters Hill for $3.9 million. It was the first time the family had considered buying in the area.

Pre-auction sales were realised from the Inner East to the Lower North Shore across various price points, with results spanning from Paddington ($3.87m) to Darlinghurst ($3.15m) to Kirribilli, the latter of which saw a one-bedroom apartment sell for over $850,000 and attract almost 65 buyers during its time on market. Meanwhile, a five-bedroom family home in Cremorne with a guide of $5 million drew over 20 groups through its first open home, ahead of its scheduled auction in late September.

Rental and investment property outlook.
Meanwhile, undersupply remains a significant challenge for both tenants and owners of investment properties. This was compounded further in August, with a slight decrease in vacancy recorded on the month prior, according to Domain. The current 1% vacancy rate (August 2023) was tighter than both the 1.2% recorded in July 2023, and the 1.1% 12 months prior, in August 2022. 

BresicWhitney’s Head of Property Management Chantelle Collin said a decrease in the number of homes for rent over the month drove this tightening. “The number of owners exiting the investment market is higher than where we as an industry would like it to be, with the cost-of-living pressures and interest rate increases now meaning an investment is simply unsustainable for some. This has a very real impact on the availability and affordability of properties for would-be renters both now and in the future, and it’s integral we remember the relationship between these factors. 

“While there is less pressure in the rental market since its peak at the start of 2023, and there has been a slight reprieve in recent months, we do expect these challenges to persist over Spring and Summer and into the New Year. International students and residents continuing to return to Sydney post-pandemic will play an ongoing role in this,” she concluded.