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.