For much of Sydney’s property market, 2022 has been a truly forgettable year.
After peaking at $1,106,279 in January this year, the citywide median dwelling price has fallen -11.4% to $1,025,684.
This has coincided with rising interest rates – the RBA has now raised the official cash rate eight consecutive times – as well as high inflation and growing economic uncertainty.
But, as bleak as this may sound, there have been several rays of sunshine here in Potts Point and the surrounding suburbs.
Prices stable rather than falling
In most parts of our local area, the median price has remained relatively stable over the past couple of years, with any recent falls more than offset by 2021’s gains.
However, some suburbs and property types have been real standout performers – bucking the overall market trend to post significant gains.
The first suburb I’d call out is Elizabeth Bay, where the median apartment value is still up 27.2% on December 2020 and 5.8% higher on the end of last year. The second is Darlinghurst, where house prices rose 15% last year, even as the market across Sydney began to tumble.
|Suburb||Median apartment value 24 November 2022*||Median apartment value 31 Dec 2021*||Annual growth||Median apartment value 31 Dec 2020*||2-year growth|
|Potts Point (apartment)||$835,000||$888,000||-6.0%||$810,000||3.1%|
|Elizabeth Bay (apartment)||$1,005,000||$950,000||5.8%||$790,000||27.2%|
* Source: Realestate.com.au market data, accessed 8 Dec 2022
Downsizers, upsizers the key to success over 2022
Darlinghurst and Elizabeth Bay have both been significant beneficiaries of the growing influence of downsizers in our local property market. These buyers are often not like the downsizers of even a decade ago. In fact, many are families who have decided that life in an inner-city apartment or terrace is preferable to a high-maintenance home in the suburbs. Others are older but still active – often working – and want to be closer to the action and amenities.
At the other end of the spectrum, we’re seeing many upsizers attempting to stay local. In the past, these buyers may have left the inner city looking for more space. But an increasing number are choosing to remain – taking advantage of both inner city life and, for many, the great schools on offer locally.
Both buyer groups are putting pressure on three-to-four-bedroom properties, and these have well outperformed the local median.
Domain data shows that, despite the Potts Point market remaining flat, the median price of three-bedroom apartments in the suburb lifted 6.8% to $4.5 million over 2022. Meanwhile, the median value of coveted three-bedroom apartments in Elizabeth Bay lifted an incredible 42.3%.
The prestige market overperforms
These figures also point to the fact that the prestige market hasn’t missed a beat over 2022. We’ve been achieving building records, street records and suburb records right through the year – some of which we’ve included below.
We think there are two main reasons for this. First, there isn’t enough prestige property in our local area to satisfy demand. When something does come to market, there is always a lot of interest.
Second, prestige buyers haven’t been as affected by interest rate rises as other market segments. This buyer group often tends to pay cash, and mortgages are less common than in other parts of the market – so rate rises haven’t really affected demand at all.
A good time to buy and sell?
Finally, I think it’s worth mentioning that times like these are often when the best property moves are made. That’s especially true if you’re thinking of moving up the ladder because the gap between property prices is smaller after a correction than when the market is in full swing.
It’s also not a bad time to sell, especially if you’re also buying. Quality properties marketed well are still attracting attention, and so long as you have realistic expectations, you’re likely to achieve a good price.
The current market won’t last forever, and history shows that when the Sydney property market turns, it tends to turn quickly. My advice is to make a move now in calmer conditions rather than waiting for the next price surge.
Key listings over 2022
1905/226 Victoria Street, Potts Point. Set on the top two floors of the Omnia building, this four-bedroom penthouse with private lift access offers the ultimate in luxury living, including two sun-drenched rooftop terraces offering panoramic views over Sydney Harbour.
3403/184 Forbes Street, Darlinghurst $8,000,000. Situated in Harry Seidler’s award-winning Horizon Building, this four-bedroom apartment was actually two apartments seamlessly joined. It offers extraordinary views that stretch from Botany Bay to the city skyline.
2/1 Grantham Street, Potts Point $10,000,000. Commanding the entire second floor of The Grantham, this three-bedroom, three-bathroom single-level residence overlooks St Mary’s Cathedral, Centrepoint Tower, the city skyline and Sydney Harbour Bridge .
If you’re thinking of buying or selling in 2023, contact my team today.