It’s a case of ‘welcome to the new market
- Written by: Tim McKibbin, CEO of the Real Estate Institute of NSW (REINSW)
It appears apartments are back in vogue. Recent Urbis figures indicate off-the-plan apartment sales in Sydney rose sharply in the September quarter at a rate double that of the June quarter and about four times that of the March quarter.
With this shift in appetite for apartments comes some interesting demand factors which could influence both sales and rents.
In coming weeks, the first international students will begin arriving back in Sydney. Two flights of 250 students each will touch down in December, with more flights arriving every two weeks moving forward on an indefinite basis.
The phased approach could see thousands of students arrive back in Sydney next year, applying steady pressure to the rental market.
At the same time, the new wave of apartment completions is set to decline, creating an environment which should enable newly-completed stock to be absorbed, especially if investors react in numbers to the changing demand picture.
While price growth overall may be easing, the median house price in Sydney is still about $1.5 million. ANZ has forecast Sydney house prices to grow about 6 percent next year before a slight decline of 4 percent the year after.
With greater choice and the potential for increased demand, the more affordable apartment market will be one to watch.
In Sydney, the surge in listings is the strongest it has been all year. We often talk about demand outstripping supply, and based on pure numbers, that remains the case.
But the weight of new listings is having an impact, as it must. Clearance rates remain healthy though, which is a good indication of the market’s resilience.
The market is finishing the year on a crescendo of sorts. More listings, more optimistic vendors, and more buyers who are feeling more empowered than they have for some time.
It’s a case of ‘welcome to the new market’, a place where buyers can expect value and vendors can be confident. Something for everyone.
It’s fitting to say that, because the market is cooling, it’s in a healthy place. And as global inflation fears swell to give rise to rate adjustment concerns at home, it’s worth reminding ourselves that a healthy residential market is not one to tinker with.
