In Spring 2023, we’re seeing new dynamics emerge within Sydney’s inner eastern suburbs property market.
From price rises to a rise in fresh listings, and from growth in the premium market to a growing number of investors and first home buyers, we explore the five trends buyers need to know.
1. Prices keep rising
2023 has been a very different year for Sydney’s property market than 2022. Despite interest rates being at their highest levels for more than a decade, dwelling values across our city have risen by an average of 8.8% since their January floor, according to CoreLogic.
Here in postcode 2011 and surrounds, we’re seeing the same pattern, with prices up on this time a year ago, with prices in Potts Point now up 8.5% compared with September 2022, according to CoreLogic. Meanwhile, prices in Elizabeth Bay have risen 12.4% since November last year.
2. More stock hits the market
One of the factors underpinning the Sydney property market since the COVID pandemic struck has been a lack of properties for sale. SQM Research shows that between May 2019 and May 2020, property listings plummeted 16.7%, and they have been at low levels more or less ever since.
We’ve noticed that the shortage of properties became more acute after interest rates started rising, with a lot of would-be sellers holding off putting their properties on the market. Now that the rate rises may have ended, a lot of these sellers are beginning to list.
As a result, we’re finally starting to see more properties come online, giving buyers greater choice. That means that, even though prices are rising once again, you’re more likely to be able to find a property that really suits your needs.
3. Action at the top end
One market segment that has never really slowed down over the past couple of years has been the prestige market. Demand for premium properties in our area, such as penthouses and sub-penthouses, has been off the charts for some time. And, the more exclusive a property is, the more buyer interest there is too.
Given the rise of prestige inner-city living, we expect the prestige segment to continue to outperform the market by some way. If you’re looking to buy in this bracket, you should expect competition. So, when you see a property you like, be prepared to act confidently and put in a solid offer.
4. More buyers at entry level too
Our area is one of Sydney’s best-kept secrets for first-home buyers. It’s true that you might not always get size (Potts Point and Elizabeth Bay are two of the only suburbs in Australia where one-bedroom apartments outnumber other property types), but you actually really do get value. The median one-bedroom property price in Potts Point is $767,500, while in Rushcutters Bay it’s just $633,500.
Where else can you be within walking distance of the CBD, have all the vibrancy of inner city living on your doorstep, and pay less than $800,000?
This is bringing in a lot of first-time buyers, many of whom are being impacted by rising rents and qualify for government assistance to get on the property ladder. It’s also attracting investors who are capitalising on those same rising rents.
And now, we’re also seeing a third group vying for property in this bracket – out-of-towners looking for a city crashpad.
So, expect a bit of competition in this bracket too.
5. Lack of development to bite?
Finally, one trend that we’ve seen playing out over the past two years or so has been a lack of development in our area. This has been a result of rising interest rates and spiralling construction costs preventing developers from launching projects. There has also been a lack of suitable project sites coming to market.
While a lot of people are probably thankful for this, we really do need more quality developments (like this one on Billyard Ave) if we’re to stop rent and house prices rising too rapidly. They’re also needed to provide the right kind of accommodation to the growing number of people who want to call our area home.
Besides, good developments can really add character to our area, rather than taking away from it. The Riley Apartments, which combine modern living with a heritage focus, are a great example of how to get it right.
With construction costs now seemingly under control and the interest rate environment more stable, perhaps you might also expect to see some similarly fantastic new developments start to emerge, with the potential for off-the-plan buying too. This could give you the perfect opportunity to move into – or within – our local area, into a great modern home.
Developers take note: we currently have a very rare opportunity to purchase 89 Macleay Street, a prime location with untapped potential and scope for a 6-storey masterpiece (STCA).
If you’re interested in buying or selling in Potts Point and the eastern suburbs, contact my team today.