The year in numbers: Sydney property market in 2018

Dec 27, 2018

Sydney remained Australia’s highest-priced capital city for property in 2018, staying well ahead of Melbourne, Brisbane, Adelaide and Perth. This came despite cooling market conditions with prices dipping to a median $1,101,532 in September, representing a 6.5 per cent annual fall1.

Apartment prices in Sydney also eased to a median $734,775 in September, representing a 1.3 per cent yearly fall as more supply came onto the market.

In spite of softer city-wide prices, there were many pockets of remarkable growth in Sydney over the past 12 months, including Bronte (26%), Rydalmere (24.3%), Woolooware (21.4%), Cremorne (18.4%), North Richmond (17.6%) and in the blue-ribbon suburb of Bellevue Hill (16%)2.

Auction clearance rates, meanwhile, picked up through 2018. Late November registered a 52.4 per cent clearance rate, up 10 per cent from the previous week and marking the fifth best result of the year3.

Market opens up for first home buyers

Softer market conditions, driven by factors like a tighter lending environment, more supply, the banking royal commission and less investor activity, were great news for first home buyers.

Largely shut out of the market over the last few years, recent data shows lending to first home buyers surged in 2018 as they saw a great opportunity to get on the property ladder.

While lending to first home buyers accelerated by almost 30 per cent nationally, lending to first home buyers in Sydney was even stronger, jumping a massive 74 per cent.

QBE, in its Australian Housing Outlook 2018-2021, attributed the ramp up in first home buyer activity primarily to stricter lending practices for investors and tighter regulations on foreign buyers.

“Owner occupier lending has spiked in more affordable areas with the introduction of further stamp duty concessions for first home buyers introduced in July 2017,” the report states.

“This surge in first home buyer lending has outweighed the easing in lending to non-first home buyers which fell by 3.6 per cent in 2017/18 as this segment of the market have become reticent to upgrade or downgrade in the current soft market.”

Sources:

  1. https://product-origin.domain.com.au/house-price-report-september-2018/
  2. https://www.domain.com.au/news/sydneys-inner-west-bears-the-brunt-of-the-citys-steepest-annual-drop-in-house-prices-20180726-h136on-754957/
  3. https://www.corelogic.com.au/news/auction-activity-quieter-year-year-2689-homes-taken-auction
  4. https://www.qbe.com/lmi/news/reports/housing-outlook

Statistics for 2018

  • Median house price at June 2018 $1,103,500
  • Annual house price movement (year to June) -7.6%
  • Forecast median house price growth 2018 – 2021 -1.2%
  • Median unit price at June 2018 $798,700
  • Annual unit price movement (year to June) -4.7%
  • Forecast median unit price growth 2018-2021 -3.1%
  • Vacancy rates (at June 2018) 2.5%
  • First home buyer lending – up by 74% in the 12 months to June 2018.
  • Lending to non-first home buyers fell by 3.6% in 2017/18
  • The value of loans to investors in NSW fell by 12.3% in 2017/18.

source: <https://www.qbe.com/lmi/news/reports/housing-outlook>

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