Sydney’s property market is proving remarkedly resilient, and this is particularly true for apartments. Latest data shows values rebounding strongly across the most popular middle and inner suburban markets, consumers attracted by the growing vibrancy throughout these areas close to CBD and urban hubs.
Premium pockets of Sydney’s eastern suburbs like Kensington are benefitting most from the uptick. One of the most desirable regions of the east, apartment values in Kensington rose 7.8 per cent over the last three months in the suburb notable for its wide, quiet leafy streets and being just 10 minutes from the city. Unit values have also gone north over the same time in inner west areas Petersham, Strathfield South, North Strathfield and Hurlstone Park according to most recent CoreLogic data.
When it comes to houses, the premium lower north shore suburbs of North Willoughby, Chatswood, Longueville Naremburn and Greenwich top the list of areas where prices are recovering fastest after declines in the last quarter of 2023.
Growing optimism
“The sharp reversal of declining values in such sought-after areas is very positive information to be sharing with our clients,” says CEO of Rose Buyers Agency Simon Rose. “When the higher end of the market starts recovering so quickly it signals that there’s rising optimism and this in turn spreads the kind of confidence that keeps property markets buoyant.”
The situation is mirrored in other capital cities too, house prices in Brisbane’s top-notch suburbs Teneriffe and Kalinga rising by up to 10.3 per cent since January, and apartment values in Melbourne’s Parkville, Carlton, North Melbourne, Southbank, Docklands, East Melbourne and parts of central Melbourne lifting up to 9 per cent.
Vigilance required
Of course, there will always be pockets of weakness in Sydney and other capital city markets, another factor of which all buyer’s agents and selling agents are wise to stay across and communicate to clients. For instance, residential valuers at Herron Todd White see the southwest Sydney market softening largely due to an influx of listings. Yet the north shore apartment market is “poised for further strengthening”, HTW analysts steering buyers of all types toward solidly constructed blocks built between the 1960s and 1990s. Overall, HTW says the increases in listings across Sydney since the start of the current auction season bode well for buyers - but we will need to stay vigilant as both demand and prices keep spiralling in coming months.
Beware higher rents
This is especially true as buyers and agents look to better times amid the current climate of rising rents. Yes, higher rents deliver investors the instant reward of more money in the pocket. But long term, rising rents benefit no-one. Why? Because rent constitutes a more than decent proportion of overall CPI – the rise in which is currently not far behind that of tobacco and nipping at the heels of insurance and financial services. And the longer the CPI keeps rising, the lower the chances of the Reserve Bank cutting the cash rate and interest rates starting to fall.
It's something to bear in mind as we go forward into a recovering market beset with the spectre of surging rents.