Sydney house prices rebounded with 2.4% in the June quarter after declining for six months. According to data reported in July, the median house price in Sydney was $1,021,968 while Sydney apartments rose 0.6% in prices. However, despite the increase, Sydney house prices have not broken the record price of $1,032,899 in September 2015. According to the Australian Bureau of Statistics, the resurgence of the market has not yet reversed the declines reported in the December and March quarters.
Real estate experts state that the price increase may be a concern for first home buyers. According to a survey conducted by the Housing, Income and Labour Dynamics in Australia, only half of adults in Australia own a home. Needless to say, the Reserve Bank is expected to cut interest rates this month to spike buyers’ interest. According to real estate experts, the interest rates are not likely to rise for at least three more years.
The decline in the interest rate brought in a great deal of attention to the Sydney property market in May. According to recent reports, more than 50% of all lending in New South Wales is for investors. With more and more attention from investors, prices rose. The south-west Sydney house prices increased 3.8% during the quarter but the houses on the upper north shore showed the biggest price hike, at up to 5.2%. The east was the strongest part of the city with a 12.2% house price growth over the year.
According to local property developers, buyers had arrived with budgets exceeding $4 million. However, in today’s market, $4 million won’t buy a large villa with a swimming pool and tennis court but a moderately large home on a block of about 1200 square metres from a good neighbourhood. The housing sales on the upper north shore have been significant with a home selling in Turramurra for $4.2 million (purchase price $2.72 million three years ago) among several notable others. The median price in the eastern suburbs is at $2.1 million.
Real estate experts report large price increases in a short time span. The low interest rates and fresh new confidence after the election, along with limited numbers of properties in the eastern suburbs are expected to continue support for strong growth for the market.