Tuesday 9 April 2024

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)
Mob: +61(0) 404 769 509 

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