Sydney’s premium house markets can weather more rate rises
The upper end of the housing market is likely to defy further rate increases after building up substantial growth momentum since bottoming out late last year, experts say. Sydney's premium house markets have seen a 28% drop in house prices in the past month, with new listings falling by 28% and 26% over a year ago. The inner-city and northern beaches have outperformed the broader market, with house prices climbing by 4% since the trough in January. CoreLogic data shows there are now 36 Sydney suburbs, out of 611 analysed, with 36 posting more than 6% house price growth in the last three months. Prices in Hurlstone Park, Ashbury, Strathfield and Croydon in the inner west also rose between 9.4% and 10.4%, while Clontarf on the northern beaches was the biggest gainer, posting a 10.8%. Other northern beaches suburbs Balgowlah and Balgowah Heights also performed strongly, gaining 9.5%, while East Killara and Gordon on the upper north shore notched up 9% and 9.2%. Prices in the eastern suburbs rose by 8.8%, while Canterbury in the Inner south-west increased by 8%. The top end of the market is driven by buyers who have cash and have amassed a large chunk of equity during the recent boom, and higher interest rates have less impact on them. However, there is a risk that the Reserve Bank of Australia goes too hard on its monetary policy and puts the country into recession if it tips the top end into recession.
Pubblicato : 2 anni fa di Nila Sweeney in Weather
New listings have slumped by 28 per cent across Sydney in the past month and dropped by 26 per cent over a year ago.
Since bottoming out in September last year, house prices in Sydney’s eastern suburbs had risen by 9 per cent, while the inner-city and northern beaches gained 8.8 per cent and 6 per cent respectively, according to Domain.
A separate analysis by CoreLogic shows house prices in the top 25 per cent of the Sydney housing market have vastly outperformed the broader market, climbing by 4 per cent since hitting the trough in January, compared to just 1 per cent nationwide.
“Generally, the upper end of the market would hit higher peaks through a period of upswing, and lower troughs through a downswing,” said CoreLogic’s head of research, Eliza Owen.
“What this means is that the high end of the market continues to lead quarterly growth rates for the duration of the cycle and since this segment is a leading indicator for the rest of the Sydney market, we can expect more markets to lift across Sydney in the coming months.”
CoreLogic data shows there are now 36 Sydney suburbs, out of 611 analysed, that have posted more than 6 per cent house price growth in the past three months.
Clontarf on the northern beaches was the biggest gainer, posting a 10.8 per cent house price increase or $437,378 in three months. Other northern beaches suburbs Balgowlah and Balgowlah Heights also performed strongly, gaining 9.5 per cent and 9.4 per cent respectively.
House prices in Hurlstone Park, Ashbury, Strathfield and Croydon in the inner west also racked up solid gains, rising between 9.4 per cent and 10.4 per cent in the past three months.
Meanwhile, East Killara and Gordon on the upper north shore notched up 9 per cent and 9.2 per cent respectively, while Canterbury in the inner south-west increased by 8.9 per cent.
“The appetite for bigger homes, which has soared during the pandemic, has not subsided at all,” said Thomas McGlynn, chief executive of real estate agency BresicWhitney.
“Most of the buyers in this segment tend to already own a property and have amassed a large chunk of equity during the recent boom, which means their borrowing is quite low, so higher interest rates have less impact on them.”
Apartments in the eastern suburbs dominated the top performing unit markets in Sydney, led by Little Bay, Centennial Park and Bellevue Hill, where values climbed by 8.8 per cent, 8.2 per cent and 7.6 per cent respectively.
“The top end of the market is generally driven by buyers who have cash, who are already wealthy, and they don’t need to take out a mortgage with a bank. This demographic tends to do very well during a strong economy and are less sensitive to interest rate rises,” said Louis Christopher, SQM Research managing director.
“But there is a risk that the Reserve Bank of Australia goes too hard on its monetary policy and puts the country into recession. That’s when the top end of the market would have a significant correction. So, another rate rise shouldn’t affect the top end of the market, unless it tips the economy into recession.”
Temi: Australia