The pandemic has resulted in a heady ride for the Sydney housing market with prices up almost 50 per cent since March 2020. The Sydney median is now steadily heading towards $1.5 million and the number of suburbs priced over $4 million has almost doubled over the past 12 months. For many people looking to sell their homes and then buy again, the speed of price growth has been stressful. The good news is that in 2022, it does look like the market will begin to calm.
In December, we saw a very slight dip in pricing with the median dropping by $10,000. Although such a small decline at a time when people are heading off on their holidays doesn’t necessarily mean that the market is slowing, there are indicators that suggest that Sydney’s extreme surge may be close to over. The main one being the time taken for properties to sell – time on market has been steadily increasing since March 2021, although historically it still remains low.
There have been a couple of things that have driven the slowdown. The main one being an increase in properties for sale. Lockdowns are house price accelerators, driving down properties for sale at a time when people are saving more. The second is talk of an interest rate rise. Although this may not happen this year, it’s looking more likely it will happen before 2024. The third is that housing finance is starting to be restricted. Of all markets, Sydney is perhaps the most sensitive to availability and cost of finance.
While prices will start to calm, the re-opening of international borders will push up rental levels. This is of course good news for investors but bad news for renters. In 2022, it will be a major driver of construction activity, particularly for units.
If you’re looking to buy in Sydney, 2022 is likely to provide more favourable circumstances, or at the very least give you a little bit more time to make decisions. For sellers, a drop in pricing still remains off the cards for now.
Read Ray White Now, a monthly insight to provide clarity to all our customers on what is happening in the market now. If you are considering selling the following report explains how you can take advantage of the current conditions to achieve the best possible sales outcome.