Sydney recorded the fastest growth in median home value in the three quarters through May, according to the latest CoreLogic market report. Has the city already reached its peak?
The median value of dwellings in the New South Wales capital rose 9.3% over the three-month period to $ 970,355. The city also recorded the strongest quarterly growth in median home value at 11% to $ 1.19 million.
On a monthly basis, the median house price in the city rose 3%, the second-highest gain after Hobart's 3.2%. Compared to last year, the median home value in Sydney was 11.2% higher.
Grant Foley, director and buyers agent at Grant Foley Property, said buyers were already wondering when prices in Sydney would start to drop. However, he said it is crucial to understand how the city's real estate market has performed in previous cycles to know how much growth is left.
"The previous peak of the Sydney market was about four years ago, in 2017, with house prices only recently rising above the level reached at the time," he said. declared. "While many forecasters suggest at least another year of solid growth in Sydney, history can still prove them wrong."
Foley said that while many experts called the Sydney property market the peak in 2014, prices continued to rise for another three years.
Overall, the Sydney market's bull cycle lasted five years at the time, with tightening restrictions on lending being a major reason it ended .
Considering the city's market segments, it is the high end that has been responsible for a substantial proportion of the recent price growth at Sydney.
"But home values ??in the bottom quartile rose 5% more modestly in the last quarter, which is a price point at which many more buyers are trading," Foley said.
As affordability constraints moderate the number of first-time homebuyers on the market, it appears investors are taking the opportunity to reclaim their space.
In fact, the value of investors' new loan commitments for housing increased by 12.7% in March. In the same month, first-time homebuyers' commitments fell 3.1%.
"Savvy investors, on the other hand, are consistently less motivated by monetary donations to purchase new properties and have now returned to the market to purchase strategically located assets that offer strong prospects for cash flow. cash flow and capital growth, ”Foley said.
This trend, Foley said, could potentially dictate the price direction for Sydney.
"It's important for buyers to dig deeper into the data to understand how the current market cycle works in practice," he said.
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