Media reports have suggested Sydney’s property market has been slowing in early 2022.
But does this really reflect what we’re seeing on the ground? We take a look beyond the data at what’s happening in Potts Point and more broadly in Sydney’s East.
State of play: the numbers
The national median home value increased 0.6% over February 2022, according to CoreLogic’s national Home Value Index (HVI), making it the 17th consecutive month values have risen.
What has changed lately, however, is the pace of that growth. CoreLogic reports that February’s national property price rise was the lowest monthly growth reading since October 2020, falling from 1.1% in January and from a cyclical peak of 2.8% a year ago.
In Sydney, housing values fell a fairly negligible -0.1%. But what is more significant is the fact that it was the first decline in 18 months.
To put this figure in perspective though, the annual growth in Sydney dwelling prices up to the end of February 2022 was an incredible 22.4%, bringing the median value to $1,116,219.
So even if you bought just a year or two ago and decided to sell now, you could still expect to lock in a significant capital gain.
Despite this, not many people are selling, as evidenced by the low supply of properties.CoreLogic also reported that Sydney’s total advertised stock was 4.2% below the five-year average.
This lack of stock is a significant contributing factor in keeping prices high.
Rising gap between units and houses
In the 12 months to January, units recorded an annual growth rate of 14.3% at the same time as house values lifted 24.8%, according to CoreLogic. This means the gap between house and apartment values was as wide as it has ever been, with the median house and apartment price now 28.3% apart.
This isn’t necessarily something we’re seeing in our area, where the prestige or luxury end of the apartment market has been performing strongly. We’ve noticed that this market segment is being fuelled by downsizers, many of whom have seen the value of their family home rise significantly since COVID-19 first struck.
The reality: this market rewards quality and potential
On the last weekend in March, Sydney-wide the auction clearance rate was sitting at 69%, compared with 85% a year ago. In the Eastern Suburbs, the auction clearance rate was 63.9%.
Numbers aside, what we’re observing is that quality properties with buyer appeal are still achieving great prices.
We’ve recently sold three properties via auction that demonstrate the strength still in the market and the types of properties for which buyers will pay a premium.
109/299 Forbes Street, Darlinghurst
This three-bedroom, three-bathroom luxury penthouse went to auction in March. It offered a generous four-car garage and spacious entertaining deck with city views. This was one of the best auctions I’ve witnessed in years. The apartment sold for $14,175,000 – a massive $2.5 million over the reserve.
Sold at auction in mid-March for $4.4 million, this three-bedroom property demonstrated the strong demand for properties with lifestyle potential near Sydney’s eastern beaches. Filled with possibilities and set on 400sqm of level land a short walk from the beach it enticed buyers who dreamed of building their own home.
132/95 Elizabeth Bay Road, Elizabeth Bay
A blank canvas penthouse with panoramic views in the prestigious Toft Monks building, this property sold at auction in early March for $11.4 million – $400,000 above the reserve. Penthouse apartments are always in high demand, and rarely come up in a building like Toft Monks.
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