What a year 2023 has been!
Despite the challenges of rising interest rates and economic uncertainties the market has shown incredible resilience especially across the Upper North Shore.
Contrary to many analysts’ expectations, property prices did not plummet even after 13 interest rate hikes by the Reserve Bank of Australia, which increased official rates by 4.25% over 18 months. In fact, property prices have been consistently rising since early 2023.
Spring saw the usual influx of properties coming to the market and there was some concern that with more listings available, there would be less urgency among buyers, yet auction clearance rates have remained strong. In fact, across the NSW Ray White network on the last weekend of Spring, there were 161 auctions scheduled with an auction clearance rate of 71% and 89% sold, including those that sold prior to their scheduled auction, showing huge momentum in the market.
From an economic perspective, the Australian economy has shown surprising strength amidst rising global geopolitical tensions. A surge in migration and the return of international students have significantly boosted demand for housing across the country. At the same time, the growth in dwelling supply is lagging, exacerbating the housing undersupply.
Sydney houses have shown robust growth throughout 2023, with the median house price reaching nearly $1.4 million in October 2023. This marks a 0.9% month change, a 2.7% quarter change, and a strong 10% annual change. Banks have thus revised their forecasts for Sydney’s property market, predicting significant growth by the end of 2023 and 2024. NAB predicts an 11.6% increase in 2023 and a 5.0% increase in 2024 for Sydney dwellings.
Despite predictions of a downturn due to rising interest rates, the Australian property market, particularly in Sydney, has shown remarkable recovery and growth in 2023. This trend is supported by strong economic fundamentals, a resilient housing demand fueled by immigration, and a rental market crisis due to low vacancy rates.
The Sydney property market is poised for continued growth in 2024.
Interest rates are likely at or near their peak, with the big four banks predicting no further significant hikes and possible rate cuts beginning in late 2024 or early 2025.
Based on this, the big four banks are also predicting a rise in house prices of between 3% and 5% in 2024.
In addition, a strong rental market and a lack of housing supply are key factors underpinning house prices. The mismatch between population growth and the rate of new housing construction continues to exert upward pressure on prices. This scenario suggests that even if interest rates rise slightly, the underlying demand for housing, coupled with insufficient supply, will continue to support price growth.
The Australian economy’s overall strength, including employment rates and consumer confidence, plays a significant role in the housing market’s health. Assuming the economy maintains its resilience throughout 2024, the property market, particularly in Sydney, is expected to remain robust.
If you’re thinking of selling your property in 2024, as the highest selling team on the Upper North Shore our team is poised to exceed your expectations.
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