The Sydney and Brisbane property markets continue to perform well in 2024, showing resilience amid economic challenges and higher interest rates. Both cities are navigating unique conditions, with Sydney remaining the most expensive market in Australia and Brisbane presenting itself as a more affordable option with strong growth potential. This report provides an in-depth analysis of the key trends and statistics shaping both markets.
Sydney Market Overview
In August 2024, Sydney’s property market maintained its steady growth. CoreLogic’s Hedonic Home Value Index shows that Sydney’s dwelling values increased by 0.3% over the month, bringing the annual growth rate to 5.0%. While the pace of growth has slowed compared to previous years, the market remains robust, driven by limited supply and strong demand.
- Median dwelling value: $1,180,463
- Monthly growth: 0.3%
- Annual growth: 5.0%
Sydney’s high property prices are largely attributed to its status as Australia’s most expensive capital city. Houses saw a slight increase of 0.3% in August, while unit values outpaced this with a 0.5% rise, reflecting the growing demand for more affordable housing options as many buyers are priced out of the detached housing market.
Sydney Rental Market
The rental market in Sydney remains tight, with vacancy rates still at historically low levels, contributing to significant rent increases over the past year.
- Annual house rent growth: 6.9%
- Annual unit rent growth: 5.8%
- Rental yield for units: 4.0%
- Rental yield for houses: 3.1%
With vacancy rates hovering around 1.6%, rental pressures remain strong, pushing rents higher and creating opportunities for investors to capitalise on strong yields, particularly in the unit market.
Auction and Sales Activity
Sydney’s auction clearance rates continue to sit around 70%, highlighting strong buyer competition, particularly in sought-after areas like the Inner West and Eastern Suburbs. Sales volumes have increased slightly month-over-month, showing ongoing demand despite higher borrowing costs. Affordable suburbs, such as Canterbury and Mount Druitt, are seeing robust activity as buyers seek more reasonably priced homes.
Brisbane Market Overview
Brisbane’s property market has continued to deliver solid growth in 2024, positioning itself as an attractive option for both owner-occupiers and investors. In August 2024, Brisbane’s dwelling values rose by 0.6% for the month, with annual growth of 6.8%, outperforming many other capital cities in Australia.
- Median dwelling value: $742,750
- Monthly growth: 0.6%
- Annual growth: 6.8%
Brisbane’s more affordable property market is drawing interest from interstate buyers, especially those migrating from Sydney and Melbourne in search of greater value. Houses saw a growth rate of 0.7% in August, while units increased by 0.5%, reflecting a balanced demand across property types.
Brisbane Rental Market
The rental market in Brisbane remains under pressure, like Sydney, with low vacancy rates and rising rental prices.
- Annual house rent growth: 7.1%
- Annual unit rent growth: 6.3%
- Rental yield for houses: 4.2%
- Rental yield for units: 5.0%
Brisbane’s rental yields are higher than Sydney’s, making it an appealing option for investors. The strong rental growth and lower property prices provide attractive investment opportunities, especially in the unit market where yields are particularly high.
Auction and Sales Activity
Brisbane’s auction clearance rates remain healthy at around 65%, supported by strong buyer interest, particularly in the middle market. Sales volumes in Brisbane have grown by 2.8% month-over-month, reflecting increased buyer confidence. Areas such as Logan and Ipswich are seeing heightened activity, particularly among first-home buyers and investors looking for affordable entry points into the market.
Factors Influencing Both Markets
Several key factors are shaping both the Sydney and Brisbane property markets:
- Economic Conditions: Rising interest rates and inflationary pressures are impacting buyer affordability in both markets, though Sydney faces more significant affordability constraints due to higher property prices. Brisbane, with its more affordable housing, continues to attract both interstate and local buyers.
- Federal Budget: Recent budget measures, including tax cuts, have boosted borrowing capacities, particularly benefiting first-home buyers in Brisbane. However, the lack of substantial reforms for rental assistance and housing supply continues to pose challenges in both markets.
- Population Growth: Both Sydney and Brisbane are experiencing strong population growth, particularly from migration, which is driving demand for both housing and rentals. This demographic trend supports long-term stability and growth in both markets.
Challenges and Opportunities
Sydney
The Sydney market remains challenging for first-home buyers due to its high entry costs. Affordability is a growing concern, and without significant supply-side interventions, price growth may continue to moderate. However, opportunities for investors remain strong, particularly in the unit market where rental yields are higher.
Brisbane
Brisbane continues to offer affordability and strong growth potential. The city is attracting both investors and first-home buyers, driven by its relative affordability compared to Sydney and Melbourne. With strong rental yields and consistent price growth, Brisbane is positioned as a key investment destination moving forward.
Summary
In August 2024, both Sydney and Brisbane’s property markets are navigating distinct challenges and opportunities. Sydney remains Australia’s most expensive and competitive market, with steady price growth and a tight rental market. Meanwhile, Brisbane offers more affordability and stronger rental yields, making it an attractive option for both investors and owner-occupiers.
As a buyer’s agent at Rose and Jones, I recommend keeping a close eye on these markets, particularly as interest rates and economic policies evolve. Whether you’re looking for investment opportunities or your next home, staying informed and agile is crucial to navigating these dynamic markets.
Source: CoreLogic Hedonic Home Value Index, September 2024
