The Sydney Property Market in 2024

As we approach the end of 2023, the Sydney real estate market presents a unique combination of recovery, cautious optimism, and evolving trends. It has been one hell of a year with the interest rate hoses battling the inflation-led fires. The sharpest rate rise in history has, however, struggled to dampen the housing market

According to CoreLogic’s national Home Value Index (HVI), the housing market has shown a notable recovery, marking a 'V' shaped rebound.

After a 7.5% drop from April 2022 to January 2023, housing values nationally bounced back by 8.3% over the subsequent ten months.?The median house price in Sydney now stands at $1,309,195, and the median unit price at $799,000.

Sydney's market, however, has seen a deceleration in growth, with the smallest monthly gain in the recovery cycle to date in November 2023. Many experts point to a period of stabilisation now as buyers adjust to new levels of interest rates and the Sydney market continues its journey around the property clock!

SQM Research’s annual Housing Boom and Bust report signals growth in Sydney's housing prices for 2023, driven by increased underlying demand for housing. Their base forecast predicts a growth rate between 5 to 9 per cent over the coming year.

As for the Big 4, well, they are not normally the most reliable or on-point when it comes to predictions. But humour us, as we sprinkle some wisdom salt on this article.

As can be seen, varied predictions emerge from the Big 4 banking institutions. NAB anticipates a significant rise in Sydney house prices by 11.6% in 2023, with a further 5% increase in 2024. Westpac’s forecast aligns with this optimistic view, albeit with a 6% growth in 2024. Conversely, ANZ and CBA are more conservative in their outlook.

Analysis and Implications

The market's current state and future outlook present a nuanced picture. The recovery phase, marked by a 'V' shaped rebound, indicates resilience in the market. However, the slowdown in growth, particularly in Sydney, suggests a period of stabilisation or even a potential decrease in property values.

Banking forecasts reflect a sense of optimism about the market's future, with predictions of continued growth. This optimism is tempered by the more modest expectations of ANZ and CBA. The slight increases in home prices over recent months further underscore a market that is cautiously inching forward.

As we look ahead, the predictions of growth, especially those by SQM Research and PropTrack, suggest that the market may yet have some upward momentum. This is further evidenced when considering the demand for residential dwellings (especially apartments) given the rise in immigration levels, against their predicted supply in the coming years. From there, it's basic economics!

However, the potential for a slowdown or stabilisation in 2024, as forecasted by Westpac and PropTrack, indicates that this growth may not be uniformly sustained.

Investors and homebuyers in the Sydney market will need to stay informed and agile, navigating the complexities of a market that is both recovering and evolving. The year ahead promises to be one of close observation and strategic decision-making, but the growth potential is bubbling.

We can feel it!