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Sydney house prices are expected to rise by up to 23% over three years, new data shows.Photo: NCA NewsWire / Max Mason Hubers
Sydney house prices are expected to rise by up to 23% over three years, new data shows.
A report by real estate industry analyst and economic forecaster Oxford Economics Australia shows relatively modest house price growth will continue across Sydney for the remainder of financial year 2024, and then in financial years 25 and 26. We predict that the pace will pick up in both.
Unit price growth in Sydney is expected to outpace house price growth until the end of June 2026, according to the Residential Property Prospects report, which forecasts property prices and rental markets to 2026.
Unit prices are expected to rise faster than home prices.
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Oxford Economics expects unit prices to rise 23.4% and house prices to rise 15.8% over this period.
This takes Core Logic's median Sydney home price over $1 million to $1,029,869 and the median home price over $1.5 million to $1,621,930.
“The performance of metropolitan areas has diverged in recent months. Melbourne and Sydney have seen an increase in the number of listings, and we expect this trend to continue in the coming quarters, slowing the rate of price growth,” said the report's authors. said Marie Kilroy, senior economist at Oxford Economics Australia.
“Tailwinds will drive prices up in Perth, Brisbane and Adelaide. Low levels of advertised property and affordability will push prices up in these cities next year. “Rate cuts from late 2024 will boost confidence. Availability will increase and broad-based price increases will accelerate again.”
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As for Sydney, “Sydney's median house price is estimated to have increased by an estimated 10.3 per cent compared to 2023, exceeding the previous peak in the December 2023 quarter, reaching $1.6 million,” Oxford said. says the Economics Australia report.
Lower interest rates will boost demand.Photo: NCA NewsWire / David Swift
“However, the pace of growth is slowing. This is due to the additional interest rate hike in November and the increase in the total amount listed. The weakening of demand is reflected in the softening of the auction success rate.”
The Oxford Economics Australia report predicts this trend will continue into early 2024, with house price growth expected to be just 3.3% and unit growth of 5.2% in 2024.
“A return to rate cuts, against the backdrop of a widening housing stock shortage, will drive the next round of price increases from the second half of 2024 onwards,” Kilroy said.
Oxford Economics Australia expects relatively cheap unit prices to support strong growth in the short term. Median house prices and unit prices in Sydney are projected to rise by 5.9 per cent and 8.3 per cent annually over the two years to June 2026, respectively.
The Albanon government's move to put a brake on house price increases is expected to have a mild impact.
Measures taken by the Albanon Government, such as increasing taxes on foreign purchases and doubling vacancy fees for homes owned by overseas investors, are expected to have some impact on Sydney's property market, with many It is expected to be limited to Sydney postcodes. End of the market.
According to the January PropTrack Home Price Index, “” several factors contributed to the slowdown in home prices in the final quarter of 2023.
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“Interest rates have risen further and the supply of homes for sale has increased, giving buyers more choice and less competition.
“Despite the higher growth in rural areas in December, the metropolitan areas combined clearly outperformed in 2023, with prices increasing by 6.44% for the year, compared to other The state market rose 3.2%.
“Despite an increase in the number of properties for sale in recent months, overall supply remains relatively subdued, particularly in Perth and Brisbane. This has led to price increases in these markets. is the main factor.
“Although prices in the capital cooled through December, prices in 2024 will be supported by population growth and a more stable interest rate environment.”
