BREAKING NEWS - Sydney’s apartment market predicated to rise by 23% in next 3 years

Wicks Place, Marrickville

Sydney’s apartment market predicated to rise by 23% in next 3 years

Leader in global economic forecasting and quantitative analysis, Oxford Economics Australia have released their report, Residential Property Prospects. The extensive research conducted predicts that in the coming 3 years, Sydney apartment prices will rise by a staggering 23%, outperforming houses which are estimated to climb by 16%. 

Dwelling Stock Deficiency

The report forecasts a growing gap between the number of dwellings being built and the number needed to house Australia’s expanding population. Oxford forecasts there will be a “stock deficiency’’ of 97,284 dwellings in 2024 – a number that will grow to 145,470 by 2026. Oxford Economics senior economist and report author, Maree Kilroy, said this shortfall would underpin prices for houses and units nationally, as well as keep upward pressure on rents. 

Record Migration and Low Vacancy Rates

Record net overseas migration and a sharp decline in residential property construction has caused the rental market to tighten in 2023, with the national capital city vacancy rate remaining at an extremely low 1% causing the recent record high rental rates. Oxford Economics predict a slower but still robust rental inflation in 2024, with house rental costs to rise by 4.1% and apartment rental rates by an even higher 5.8%. 

Projected Interest Rate Cuts

The report states that Sydney’s skyrocketing house prices will push property buyers to the more affordable apartment market, lifting apartment demand and therefore driving apartment prices up. And the interest rate cuts that are projected to track downwards from the latter part of 2024 will cause apartment prices to rise commensurately as more people who can afford the finance hit the market. 

Decade lows for dwelling approvals, commencements and completions

The worsening “stock deficiency” projected by Oxford Economics is supported by the latest dwelling construction data from the Australian Bureau of Statistics (ABS), which shows dwelling approvals, commencements, and completions are tracking around decade lows at the same time as Australia’s population is growing at a record pace. And as it doesn’t appear that the Albanese Government is going to slow its full steam ahead approach to immigration anytime soon, Australia’s housing shortage will only worsen, placing upward pressure on both apartment prices and rents.


Surry Hills Village, Redfern

Investor confidence strengthening

The detail in Oxford Economics’ report provides a welcome boost to the confidence of many investors that now is a good time to invest in Sydney apartments. If you are interested in either investing or purchasing a fantastic new residence, Contact the Cramer team today to learn more about Wicks Place, Marrickville or Surry Hills Village.

Emma Chappell
Head of Projects (Sales & Marketing)
emma@cramerproperty.com
Mob: +61(0) 404 769 509 

Will 2024 be a good year to buy Sydney real estate?

As the New Year kicks off, leading economists are already anticipating a national surge in property prices. The projected price increases are being driven by a pronounced property shortage, the rental market crisis, the stabilisation of interest rates and a new wave of immigration. And as usual, Sydney property is at the forefront of the Australian price surges.

In spite of increasing mortgage costs, the housing market showed exceptional resilience last year, with a nationwide increase of over 8%. This achievement defied pessimistic forecasts and marked a substantial turnaround from the 5% decline observed the previous year. And Sydney property prices increased by a whopping 11.1% over the last year since January 2023. These increases are seen particularly in lifestyle or blue chip suburbs where properties are tightly held causing further supply issues.

                                           

Over the past two years, the Reserve Bank has implemented a series of 13 incremental cash rate hikes, ultimately pushing interest rates to a high of 4.35%, all in a concerted effort to combat persistent inflationary pressures. However the prevailing opinion amongst economists and financial experts predicts rate cuts across the next quarter, with experts asserting that Australia’s central bank has reached the peak of its tightening cycle.

Sydney Property supply issues are reaching critical levels, driven by our ever-expanding population, fed largely by the new immigration surge, the sudden increase in renters who want to own their own home and those moving back to the city after the mass exodus induced by the covid-19 pandemic. The Sea Change dreams of some who left at this time have been turned on their heads, with the realities of regional life prompting a desire to move back to ‘the big smoke’.


      SOURCE: Sydney Morning Herald
                         
Regarding renting, PropTrack economist Angus Moore found that Sydney is by far the most expensive city to live in in Australia and the undersupply of property continues to see rental prices rise, at an astounding 11.1% in 2023! Based on median rents, Sydney is $10,000 a year more expensive to live in than Melbourne. The low availability and incredibly high rents are forcing many into the housing market before more property prices rises occur.

In light of the exponentially rising rental market of the past year, it makes sense for would be First Home Buyers and First Time Investors alike to place their feet firmly on the property ladder. And with property prices set to rise again, there really is no time like the present. In the words of property guru, Michael Yardney, “Rather than trying to time your next property purchase based on where we are in the cycle, take a long view and if your income is secure and the time is right for you, this may be an ideal time to get a foothold in the Sydney property market while others are sitting on the sidelines.”

So if you are serious about getting into the property market, or would like to purchase a brand new, architecturally superb, fabulously built home, Cramer currently have on offer some outstanding properties in Sydney’s best blue chip and lifestyle suburbs, call the Cramer team today to learn more.