Overview of Market Trends
Sydney’s property market experienced a notable decline in December 2024, closing the year on a more subdued note. According to CoreLogic, dwelling values in Sydney fell by -0.6% for the month and -1.4% for the quarter, reflecting softer buyer demand and increased advertised stock levels. Annual growth, however, remains positive at 2.3%, maintaining Sydney’s position as Australia’s most expensive market with a median dwelling value of $1,191,955.
Property Value Insights
Houses and units showed divergent trends. While house values dropped by -0.7% in December, units declined by only -0.3%. Over the year, houses saw an annual growth of 2.5%, whereas units recorded a 1.8% increase. The relative affordability of units is attracting buyers, particularly as rising interest rates impact borrowing capacities.
Rental Market Dynamics
The rental market remains one of Sydney’s most competitive segments. Median weekly rents are $670 for houses and $530 for units, with vacancy rates at a low 1.6%. Gross rental yields are stable at 3.0%, but rising rental prices continue to stretch tenant budgets.
Key Drivers of the Market
- Macroeconomic Environment: Rising interest rates and the cost-of-living crisis have dampened borrowing power.
- Supply-Side Challenges: Construction delays and material shortages persist, limiting new housing supply.
- Rental Pressure: Continued rental demand driven by low vacancy rates and high migration has sustained upward pressure on rental prices.
Opportunities and Outlook
The ongoing infrastructure development across Sydney’s key regions presents long-term growth opportunities. Despite current headwinds, the enduring appeal of Sydney’s property market lies in its stable demand and diversified housing options. Buyers and investors looking for affordability and rental yield opportunities may find value in the unit market and suburban areas.
Final Thoughts
Sydney’s property market remains a dynamic and resilient landscape, albeit one now characterised by stabilisation rather than rapid growth. As a buyer’s agent at Rose and Jones, I advise clients to adopt a cautious yet proactive approach, capitalising on market opportunities while navigating affordability constraints. With careful planning, Sydney’s housing market continues to offer solid prospects for both homeowners and investors.
Source: CoreLogic Hedonic Home Value Index, January 2025
